SingTel Optus Pty Ltd & Anor v Australian Rugby Football League Limited & Ors [2012] HCATrans 214

[2012] HCATrans 214

[2012] HCATrans 214

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S116 of 2012

B e t w e e n -

SINGTEL OPTUS PTY LTD (ACN 052 833 206)

First Applicant

OPTUS MOBILE PTY LIMITED (ACN 054 365 696)

Second Applicant

and

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 293)

First Respondent

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538)

Second Respondent

AUSTRALIAN FOOTBALL LEAGUE (ACN 004 155 211)

Third Respondent

TELSTRA CORPORATION LIMITED (ACN 051 775 556)

Fourth Respondent

AUDIO‑VISUAL COPYRIGHT SOCIETY LTD

Fifth Respondent

Office of the Registry
  Sydney  No S117 of 2012

B e t w e e n -

SINGTEL OPTUS PTY LIMITED

First Applicant

OPTUS MOBILE PTY LIMITED

Second Applicant

and

AUSTRALIAN FOOTBALL LEAGUE (ACN 004 155 211)

First Respondent

TELSTRA CORPORATION LIMITED (ACN 051 775 556)

Second Respondent

Applications for special leave to appeal

GUMMOW J
HAYNE J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 7 SEPTEMBER 2012, AT 9.33 AM

Copyright in the High Court of Australia

____________________

MR R. COBDEN, SC:   May it please the Court, I appear with my learned friends, MR J.M. HENNESSY, SC and MR N.J.T. SMITH, for the applicants in both matters.  (instructed by Baker & McKenzie)

MR N.C. HUTLEY, SC:   If your Honours please, I appear with my learned friend, MR N.R. MURRAY, for the first and second respondents in S116 of 2012. (instructed by Kennedys)

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MR P.W. FLYNN, for the AFL and Telstra, respondents in both matters.  (instructed by King & Wood Mallesons)

GUMMOW J:   Yes, Mr Cobden.

MR COBDEN:   Your Honours will be aware of the technology involved in this case, described in the judgments, but if I could just outline it very quickly.  It is a system whereby Optus subscribers, via electronic program guides or EPGs - and your Honours will recall those from the IceTV Case - on their PCs or their mobile phones and activate recorders that are standing by Optus to record and later replay on those same devices, at the consumer’s request, programs. In the present case they were sports broadcasts by reason of the other parties but they could be anything that is on television. No licence is obtained from the owners of a copyright for that purpose. Optus relies on the various provisions of the Act, of which section 111 is the most central.

GUMMOW J:   This appears at page 7 of the application book.

MR COBDEN:   Yes, it does, your Honour.  It went through various forms in the legislative process which is of a little importance and I will refer to that later.  The critical part is - your Honours may recall that the old version of this just allowed a defence against the television broadcast and was a very narrow and somewhat pointless defence because it only really covered you if you taped live sporting broadcasts but would not get you for the replay parts because they are cinematograph films and the like.

There was a decision taken – and the explanatory materials are fully set out in the judgments – to bring the law much more into relation with reality given the widespread presence throughout the community of VCRs, the old video cassette recorders, but more recently digital recorders, recording systems associated with subscription TV and the recording capacity of computers themselves.

So the defence, as your Honours will now see, if somebody makes a cinematograph film or sound recording of a broadcast for a time more convenient then the making of the film or recording does not infringe copyright in the broadcast – that is the television broadcast copyright – or in any work or other subject matter included in the broadcast.  So it is now a thorough defence to all copyright subject matter that might be packed into the broadcast.

Now, there are various features of the Optus system that are described in the judgments such as the fact that only the consumer can cause the recording to be made back at the Optus premises using their EPG from their device.  Copies are then made.  In fact, four copies are made by reason of format.  The format is in popular usage, but solely for that consumer.  If another consumer wants to record the same thing, copies are made specifically for them. 

They are retained on the system for a maximum of 30 days and then deleted, and only the particular consumer can recall them back from the Optus server and play them back on their mobile device.  I will not go into all those technical details by reason of the time limits, of course.  There are four issues ‑ ‑ ‑

GUMMOW J:   It comes down to the word “make”, does it not, or “makes”, I should say?

MR COBDEN:   Who makes the cinematograph film or the copy of the cinematograph film.

GUMMOW J:   Or who is sufficiently involved to warrant the conclusion that they make.

MR COBDEN:   That is the first issue, quite so, your Honour.  That is an issue – the word “maker” is not defined in the Act, either in relation to making a cinematograph film of a broadcast or making a copy of a cinematograph film.  There is a little red herring in section 22(4) which identifies the maker of a film but it is agreed that is for subsistence purposes and does not work for infringement purposes.  That was agreed before both levels below.

So the critical way of expressing the first issue is, we submit, who makes the copy - if I can just say the copy rather than the cinematograph film of the broadcast or the copy of the cinematograph film, copies would be shorthand – who makes the copy in circumstances where now the technology and the internet and mobile equipment permit effectively remote activation of recording machinery. 

We are all familiar with – one starts out with concepts of making.  Once making was manufacture, made by hand, and of course you are right there in the presence of the thing you make.  Then you get a little bit more distance as machinery arrives.  But now in the world of certainly creating of electronic copies you do not need to be present near the machinery at all. 

GUMMOW J:   This is a qualification to the monopoly right, is it not?

MR COBDEN: Section 111?

GUMMOW J:   Yes.

MR COBDEN:   It is a statutory defence, as it is sometimes called, your Honour, because it says “if you fit these requirements then copyright is not infringed”.  Yes, in a similar way to fair dealing defences and in a similar way to all the specialised photocopying, educational sections and the like.  The trial judge determined here that the Optus subscribers were the makers, effectively that the Optus machinery which sat idle, although very specialised for the purpose, was only brought into activation, and a copy was made, in the sense that the material, a hard disc, was treated so that ‑ ‑ ‑

GUMMOW J:   There may be more than one maker, may there?

MR COBDEN:   The Full Court held that there is more than one maker, your Honour, and the Full Court held that ‑ ‑ ‑

GUMMOW J:   Your problem is you have to show that you are a maker.

MR COBDEN:   Our problem is that we want to show that only the subscriber is the maker.

GUMMOW J:   Yes.

MR COBDEN:   Yes, not that we are the maker. Although, your Honour, we say that section 111 can be engaged even if we are the maker. We can make it for somebody else’s sole purpose. I will come to that in a moment. The Full Court held that there were two possibilities. Having observed, I might say, paragraph 9 of the Full Court’s decision – page 109 of the application book – their conclusions differ from the primary judge but they found the questions raised in the appeals to be of some difficulty and considerable uncertainty. Then they posed the question in paragraph 49 at page 122 of the application book:

The question to be answered is easily stated:  “Who ‘does’ the act of copying?”:  Copinger and Skone James on Copyright, 7-21 (16^th ed, 2011).  Its answering is the less easy because of the sophistication of the automated technologies used and the electronic communications made. 

We embrace that, your Honour.

Yet a legal person has to be identified who or which does that act.

Then at the end of that paragraph:

The rival contenders are Optus, the subscriber, or Optus and the subscriber jointly.  Each can be advanced with varying plausibility –

Their Honours went for Optus and the subscriber as a preference ‑ ‑ ‑

GUMMOW J:   Well, does not it then just turn upon the particular use of the technology in this particular case? 

MR COBDEN:   Yes.

GUMMOW J:   What is the question of general importance?

MR COBDEN:   Identifying who the – what is the test to apply as to who the maker of a copy of subject matter is important to cinematograph films is in the context of there being the capacity of remote making.  Remote making is not confined to situations such as this because when one writes an email, which might contain an infringing copy of something, and one is using a web based email service, one is doing that on equipment adapted for that purpose somewhere in one’s web service host’s facilities.  So there it is exactly the same.  A large number of facilities are provided but, we say, who is the last human activator or the last volitional act that is creating the copy.  So, therefore, it is a matter of considerable general importance because it goes well beyond these particular circumstances. 

We submit that, in fact, the textual indications in the Act are such that there cannot be two makers, and the easiest one of those to identify is, for example, the definition “infringing copy”.  Suppose that there are two makers and that they have different purposes and your Honours know that, for example, of two makers one of them could have a purpose which is a fair dealing purpose but another one might not.  I will come to an example in a moment.  Section 10 defines an “infringing copy” as a copy, the making of which constituted an infringement of the copyright in the work or subject matter.

If you have joint makers, then a copy can be at the one time an infringing copy and not an infringing copy, yet remedies apply to it such as section 116 and sections 37 and 38 which tend, we say, too strongly against the holding that there would be more than one maker of a copy, more than one person referred to in section 111 who does the act prior to the copyright. There is a panoply of other persons who could become involved but, as your Honours will know, joint tortfeasor, an authoriser, all the matters explored by your Honour in WEA v Hanimex and more recently in the iiNet Case.

This question, your Honours, is a question that has arisen with some controversy in other jurisdictions.  We have given your Honours references to the Second Circuit case called Cartoon Network, which held as consonant with Justice Rares, and a Singapore case, Singapore Court of Appeal, Record TV, and the text writers, that is to say Copinger and learned authors of articles, Professor Ginsburg and Dr Giblin have all identified these as issues – this sort of issue as an issue that is going to pervade electronic commerce.

BELL J:   Is one difficulty, to return to the question that the presiding judge asked you, that if one looks at Cartoon Network – I do not fully understand the technology but I think it was on a buffer for some very brief period of time as distinct from the facts here of copies made for four different platforms and remaining for 30 days.  These all seem very fact specific sort of considerations.  I am not quite sure how your email illustration is going to be resolved by a determination in your favour on the facts of this case contrary to the unanimous view of the Full Court.

MR COBDEN:   The way it would be done would be by adopting the approach, we would submit, the approach which does fit all purposes, we respectfully submit, and which is advocated by the authors of Copinger who have thought carefully about this problem, as all text writers do, and we have given your Honours that material in a bundle of material which I hope your Honours have.  It is at page 25 of our bundle.

GUMMOW J:   Yes.

MR COBDEN:   Your Honours have a couple of pages of Copinger there, 7‑21:

Who commits the act of copying?  In the era of electronic communications and the use of other new technologies, it may often be crucial to know who commits the actual act of copying –

Then they give some examples from ‑ ‑ ‑

GUMMOW J:   The ambiguity is the phrase “actual act”, is it not?

MR COBDEN:   Yes.  They approach the question having given a range of examples halfway down the next page, and there is a bit that was actually quoted by the Full Court which I took your Honours to a moment ago:

The question always remains the same –

It is exactly halfway down the page –

who “does” the act of copying?

They add a second limb to it which is to help answer that question –

Who is the human person –

who may be of course acting as part of a company –

who is the most proximate cause of the act being done?

That is a test that is very reminiscent of the test in the Cartoon Network and the Record TV Case which is the last volitional act and, in our respectful submission, that is a very good workable guide to resolving this question which will arise, in our respectful submission, in a vast range of electronic communications.

HAYNE J:   But your proposition is that there can be one maker and that maker is necessarily identified as the last human actor.  Is that right?

MR COBDEN:   As either the human or the person who, if it is a company, that human is the manifestation of that company, of course, yes.

HAYNE J:   You seek to engage that with section 111?

MR COBDEN:   Yes.

HAYNE J:   The engagement presents its own difficulty, does it not, because 111 applies if a person makes, et cetera.  Have you not imposed on 111 a frame of reference which at least 111 does not itself support, namely, singularity and last human actor?

MR COBDEN:   Well, section 111 requires that a person makes a cinematograph film, that is precisely the language of the infringing act in relation to broadcasts. So that has just been borrowed from the exclusive rights of the broadcast right. So that, with respect, in our submission, refers back to precisely the same question. The next question is whose purpose it is, and I will have something to say about that in a moment, but can I give an illustration also about the question of joint makers and purpose which answers both these questions.

There are many cases where a fair dealing would apply. Say, for example, section 43(2) allows the fair dealing defence if one reproduces material, or fair deal –it is immaterial - for the purpose of giving legal advice. Now, if one reproduces that material in an advice and sends it down to the photocopying shop to have 20 copies made, the photocopying shop does not have the fair dealing purpose themselves, they have the commercial purpose of making the copies and selling the copies back to you. But it would, with respect, not be a workable system of fair dealing purposes, similar to section 111 purposes, if the photocopying shop could be sued for making those copies when the making of the original, which is being copied, did not infringe copyright by reason of a fair dealing.

So we draw the same kind of thinking in aid, moving to the section 111 part of the case, in aid of our reliance on that. First of all, we say that because the maker – in our primary case the maker is the subscriber - then you can look at the subscriber’s purpose, solely for private and domestic use by watching or listening to a broadcast at a time more convenient. But we submit that that can also apply – the analogy would be to the photocopying example I just gave – to a finding which the Full Court made that Optus is either the sole maker or the joint maker.

We have raised the point in our written submissions, we raise it again, that the Full Court’s interpretation of section 111, which is at paragraph 89 of the application book 132 to 133, where they say:

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 s 111(1).

We say that that is not, with respect, the correct construction.  First of all, the photocopy example I just gave a moment ago would be against it, but secondly, in another section introduced contemporaneously, section 109A, if one just goes back a couple of pages in the Act, says there, which is a format‑shifting section:

the sole purpose of making the later copy is the owner’s private and domestic use -

That is not said in section 111. We have also pointed in our written submissions and argued before the Full Court that the extrinsic materials, the history of the enactment of section 111, which went through about three forms and had three explanatory memoranda, actually made a reference which the Full Court quotes that says did not carry through to this defence being provided so as to clarify the role of external service providers. So for all those reasons, we submit that the Full Court is wrong and that the matters are of considerable general public importance.

GUMMOW J:   Now, what was the significance of the Singapore case?

MR COBDEN:   That was the Singapore Court of Appeal.

GUMMOW J:   Do we have that here?

MR COBDEN:   Sorry, your Honours.  The first significance of it I could make while people are looking, to answer your Honour’s question, is that the legislation is on identical terms.  Singapore some years ago copied the Australian Copyright Act lock, stock and barrel and has continued to amend its Copyright Act, tracking, by and large, the Australian Copyright Act.  So it is the very same legislative provisions.  It is in your Honours’ bundles behind tab – sorry, we have not put it in your Honours’ bundles, but it involved a very similar fact situation to the present one, and it followed Cartoon Network in the Second Circuit.

GUMMOW J:   Was this considered by the Full Federal Court here?

MR COBDEN:   The Full Federal Court referred to the Singapore case but did not rely on it in its reasoning.  Some reliance seems to have been placed on a Japanese case which is quite different, where the Japanese legislation – I can give your Honours a reference to that.  The Japanese legislation required one to look for, I think, the main entertainer, or some wording of that kind, and was quite different.  We submit that the better reliance would have been on the Singapore case and the Cartoon Network Case - paragraphs 60 and 61.

GUMMOW J:   Of the Full Court?

MR COBDEN:   Yes, of the Full Court, page 125 of the application book.  These are reasons, as paragraph 58 identifies:

for rejecting the proposition that the subscriber was the maker for s 101, hence s 111, purposes.

There are four reasons but the third, paragraph 60, the reference to “main performer” – I said “main entertainer” wrongly:

“main performer of the act of [copying]” –

that was the language used in the recent Japanese decision but that itself follows material in the Japanese legislation.  Then at 61, as the Full Court referred to, there is a division between the Federal Courts in the United States and the Cartoon Network is in the Second Circuit and Arista is, I think, in the Fourth Circuit.

GUMMOW J:   In the United States there is no precise analogy to 111?

MR COBDEN:   No, no.  There is in Singapore because of the, if I can put it politely, slavish copying, doubtless flattering copying of the Australian Copyright Act. 

GUMMOW J:   Thank you.

MR COBDEN:   We would say just briefly in answer on the other issues that the Full Court – his Honour did determine but the Full Court did not which is the communication issues that our learned friends say they would only arise on a notice of contention.  I think they now think that should be a cross‑appeal, but as they have conceded, or they have indicated to me, it would be an inevitable cross‑appeal.  For the reasons we have outlined the two issues arising there, who is the maker of a communication and whether the communication is to the public, are themselves extremely important questions vitally infecting every area of electronic commerce and not looked at by any ultimate Court of Appeal.  May it please the Court.

GUMMOW J:   We do not need to call on you, Mr Hutley or Mr Catterns.

There are insufficient prospects of success in displacing the result reached by the Full Court of the Federal Court to warrant a grant of special leave. Nor are we satisfied that consideration of the particular facts of this case could yield any universal proposition respecting the application of section 111 of the Copyright Act 1968 (Cth). Accordingly, special leave in each application is refused with costs.

AT 9.55 AM THE MATTERS WERE CONCLUDED