Australia's second-largest telco Optus is weighing up its options after a Federal Court ruling effectively ended its TV Now service.
TV Now was launched in July 2011 and allowed subscribers to watch recorded free-to-air programs on their Optus mobile devices or PC, enabling NRL or AFL matches to be viewed on a slight delay.
The court victory to Telstra and the AFL and NRL, which said the Optus service breached copyright, could have implications for other telco and internet companies.
Federal Court justices Paul Finn, Arthur Emmett and Annabelle Bennett on Friday overturned an earlier Federal Court ruling that Optus had not breached the Copyright Act with its TV Now service.
Optus is reviewing Friday's judgment and could take an appeal to the High Court.
"We have to look at all our options, which will include an appeal," Optus spokeswoman Clare Gill said.
The original ruling in February found TV Now subscribers were responsible for the recordings, similar to a person using a video or digital recorder.
That gave the service an exception from copyright laws.
But justices Finn, Emmett and Bennett ruled that TV Now recordings were made "not made by the subscriber alone".
"It was made either by Optus alone or by Optus and the subscriber," they said in the judgment.
The purpose of TV Now was for Optus to derive as much market advantage in the digital TV industry as its commercial exploitation would provide, the judgment said.
"Optus cannot invoke the ... exception (to the copyright laws)," it said.
Telstra welcomed the result, describing it as a victory for Australian sport.
"Protecting intellectual property allows rights holders to invest in improving the quality of their content," a spokesman said.
"The investments Telstra has made under its agreement with the AFL have produced a great product for AFL fans."
The case could result in changes to the legislation, given the profile of the case and uncertainty created by technological changes, law firm Finlaysons partner John MacPhail said.
"This decision unfortunately makes the commercial exploitation of technological innovation a little bit harder," he said.
"With the advent of cloud computing, this decision raises the serious prospect that providers of cloud computing services could now be held liable for the content which is uploaded onto their systems."
Shares in SingTel, Optus' parent company, lost two cents to $2.41 on the Australian market.