Bloomberg News

Optus Loses Legal Fight With Sports Leagues Over Matches

May 10, 2012

SingTel Optus Ltd. will ask Australia’s top court for a review after losing a legal dispute with sports leagues wanting to protect broadcasting rights valued at more than A$2 billion ($2 billion).

The Australian Football League, the most popular spectator sport in the country, and the National Rugby League sued Optus, claiming its TV Now service infringes copyright. An Australian federal court appeal panel on April 27 agreed with them, overturning a lower court ruling.

“This is a very important public policy issue that needs to be determined by the highest court in the land,” Paul O’Sullivan, Optus’s chief executive officer, said in an e-mailed statement today. “Cloud computing will see Australians using applications held online and wanting to store online, rather than just using fixed hardware based in the home.”

Central to the dispute is determination of who creates the electronic files viewed by the customer. TV Now allows users in Australia’s mainland state capitals of Sydney, Melbourne, Brisbane, Adelaide and Perth to record free-to-air television programs, including AFL and NRL games, and play them back on computers, Apple Inc. iPads, and most 3G mobile devices. Some programs can be viewed within minutes of airing live.

The AFL, NRL and Telstra Corp., Australia’s biggest phone company, said TV Now infringed their copyrights because the service makes the match recordings, stores them on its servers, and passes them on to customers.

Judge Steven Rares said in February that Optus customers record the broadcasts for personal use, much as people use video cassette or digital video recorders, which Australian copyright allows. His decision was then overturned by the three-member appeal panel in Sydney last month.

‘Future for Innovation’

The case is “extremely important in deciding the future for innovation, consumer choice and competition,” O’Sullivan said.

Optus ceased offering the TV Now service following the appeal court ruling. The company won’t seek an injunction to let it resume the service, pending the outcome of the High Court appeal, Jacqui Christie, a spokeswoman at Optus, said by e-mail.

The AFL signed a five-year, A$1.25 billion agreement last year with Seven West Media Ltd. (SWM)’s Seven Network, Foxtel, Australia’s biggest pay television operator, and Telstra Corp. for exclusive broadcast rights to its games. The NRL is in talks with broadcasters on a new deal that the Sydney Morning Herald reported would be valued at A$1.2 billion.

The case is National Rugby League Investments Ltd. v. SingTel Optus Ltd. NSD201/2012 Federal Court of Australia, Full Court (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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