Optus-NRL Decision Has Huge Implications For Cloud Computing

Today the High Court refused an application by Optus for special leave to appeal, upholding the decision of the Full Federal Court.

Some are hailing this as a win for Aussie sports, but this decision has huge implications for Cloud Computing (SaaS) providers.

Essentially, anyone who provides a cloud computing service is now responsible for the activities of their users as if they took the action themselves. Even if that action is legal for the user, it may not be legal for the service provider.

Full Federal Court Decision

Optus provided a service called TV Now, enabling users to record free to air TV and play it back on their mobile, tablet or PC.

The Full Federal Court held that even though Optus didn’t select programs to record, by providing the facility to record the program it was actually making a copy itself (or making a copy jointly with the user – having the same effect).

And even though home users have the right to ‘timeshift’ TV shows that way, Optus as a business does not.

So Optus breached copyright laws by providing a facility for its users to do something that they are legally entitled to do.

What Do I Need To Do?

Unfortunately it is not enough that your service is legal to use or provides access to legal content. Nor is it enough that your cloud service would be perfectly legal as a standalone device with the exact same capability (such as a DVD recorder or PVR).

Until our copyright laws catch up with cloud computing technology, we recommend you review your content licences and ensure they cater for every copy, transformation and transmission throughout your content delivery process.

If you provide a cloud based PVR or streaming service we recommend you seek legal advice urgently.

Footy fans are simply stuck without cloud technology for the time being, and will have to watch the game live, or record it themselves.

Where To From Here?

As the High Court has refused Optus leave to appeal, Optus is out of options, and we’re stuck with the decision of the Full Federal Court (see link).

The Australian Law Reform Commission is currently considering whether exceptions and statutory licences in the Copyright Act 1968 (Cth) are adequate and appropriate in the digital environment. The ALRC has published a detailed discussion paper and seeks submissions by 16 November 2012.

We strongly encourage you to review the discussion paper and put in a submission.