THE task of modernising Australia's copyright laws is now in the hands of Parliament, with the High Court refusing to hear Optus' appeal about its web-based television recording service.
Optus will now permanently shut down its TV Now service, exhausting its legal opportunities in a battle against the Australian Football League, the National Rugby League and Telstra.
Optus hoped to overturn a Federal Court decision that found TV Now breached exclusive copyright deals between the football codes and Telstra.
TV Now records television in a data centre and then sends replays on demand to customers' mobiles or computers over the internet. The AFL and NRL argued that Optus was responsible for recording matches from free-to-air television and replaying them in near-live conditions.
Both the AFL and NRL have exclusive internet broadcast rights with Telstra. Optus argued TV Now fitted into section 111 of the Copyright Act, which allows people to record shows for personal use and won the first Federal Court case in February 2012.
But this early decision was overturned by a full bench of the Federal Court in April 2012, after the appeal judges found section 111 was never intended to be exploited for commercial gain. Optus charged customers up to $20 a month for 20 hours' worth of recordings.
But Monash University's copyright law expert, Rebecca Giblin, said the High Court's decision not to hear the case left politicians with the responsibility of updating Australia's copyright rules.
While the Australian Law Reform Commission is reviewing copyright exceptions, including those that apply to cloud computing, its recommendations will still have to be turned into legislation, she said. ''I am not convinced that the government of the day will have the political will to alter the full Federal Court's interpretation of the time-shifting exception,'' Dr Giblin said.
The Full Court found that Optus ''made'' the copies of time-shifted television shows, not just the user.
This is despite the fact that the time-shifting exception, passed in 2006, was intended to be technologically neutral and to cover current and future technologies.
''Although Australian consumers finally have a legal right to time-shift TV, it is likely to prove of little use to them. Under the Full Court's reasoning, even providers of technologies like TiVo could be found to be infringing copyright,'' Dr Giblin said. The vice-president of corporate and regulatory affairs at Optus, David Epstein, said the debate about copyright in the internet era will continue.
''This is a very important public policy issue that still needs to be resolved to give clarity to both consumers and the industry,'' he said.
''People are increasingly wanting to watch TV when they want, where they want and on what they want. But the law as it stands imposes an arbitrary distinction between technologies.''
The AFL welcomed the decision and said Optus was ordered to pay its legal costs for the High Court hearing.
A Telstra spokesman said it was a ''great result'' that gave certainty to content owners.