Telstra, the NRL and AFL have won their appeal against Optus's online broadcasting of Australian football and rugby league games, re-establishing Telstra's role as the nation's dominant online sports broadcaster.
We will now go away to consider our options, which will include an appeal.
This year, Optus won a landmark Federal Court case, which allowed it to continue operating its TV Now system, whereby viewers could watch video streams of AFL and NRL matches on their smartphones or computers as close as two minutes behind the live TV broadcast.
Optus's TV Now system aimed to offer streaming of sports contests with only a minor delay.
This was despite the fact that Telstra already has a deal to screen the live TV broadcast on the internet.
Then, the Federal Court upheld Optus's right to stream the games, rejecting the argument of the AFL, NRL and Telstra that Optus's actions were a breach of copyright.
The court previously ruled that it was the subscriber, not Optus, who actually chose to stream the event and that the action was similar to using a video cassette recorder to copy a television broadcast.
But the full bench of the Federal Court today overturned the decision, with justices Arthur Emmett, Annabelle Bennett and Paul Finn finding that Optus was responsible for the act of recording and it had therefore breached copyright laws.
Great result: Telstra
Telstra has previously claimed that a decision in favour of Optus could impact on any future exclusive rights deals, stripping the codes of valuable revenue. It has forked out millions in deals with the two codes to stream the games.
Speaking outside court, Telstra spokesman Craig Middleton said the judgment was a great result, not only for Telstra and the two codes, but for players and fans everywhere.
"The judgment is vindication for the sporting bodies and the content providers," he said.
"This provides certainty for the content providers, players, fans and sport in general.
"What was at stake was the future of content rights for sport. We've invested millions of dollars in online sporting rights. If that investment was devalued, that would have affected sports fans from the grassroots right through to elite sport."
A Telstra spokeswoman said in a statement the judgment ensured the intellectual property rights of content owners would be upheld.
"It ensures that sports bodies, and Australian content owners more generally, are able to receive a fair return from their property," the spokeswoman said.
"Protecting intellectual property allows rights holders to invest in improving the quality of their content."
Commonsense has prevailed: AFL
AFL chief executive Andrew Demetriou told 3AW he was pleased that "commonsense prevailed".
"Basically what that means is that Optus must now suspend offering a service in which they didn't pay for," he said.
"It [what Optus was offering] was clearly an inferior product. I've been saying all along it was something that we believe was unethical. It was improper. And we're certainly appreciative of the judges' decision."
Important decision: league
The Australian Rugby League Commission welcomed the decision.
Chief executive David Gallop said that the decision was an important recognition of the rights of sports and that it was all the more significant given the commission's broadcasting negotiations.
"We have always believed there was a clear principle in play here: that the sports are entitled to control who shows their events and who profits from those events.
"Companies should not be able to profit from our content without investing in the sport itself.
"We have partners who are working with us to develop innovative new ways of experiencing the game and they are doing so in ways that benefit the fans, the players and the sport in general.
"It is important that we all share in the opportunities that new technology provides but this can't be at the expense of our basic commercial rights and this is an area that government needs to continue to address."
Very disappointed: Optus
Optus head of corporate and government relations, Clare Gill, said the company was "very disappointed by the decision".
"We will now go away to consider our options, which will include an appeal."
Optus initiated action late last year seeking "a declaration from the Federal Court that the threats of legal proceedings for infringement of copyright are unjustified".
Justice Steven Rares of the Federal Court in New South Wales granted those protections in February when he found that "the user alone did the acts involved in recording the copyright works", because the user had to specifically request each recording.
The AFL, NRL and Telstra appealed against that decision and the full bench today announced it disagreed with the primary judge.
A summary of the three-judge panel's decision that Justice Finn read to the court said that one of the primary issues raised in the appeal was who should be considered the maker of the recording.
"The primary judge's answer to this was that the maker was the subscriber - ours is a different conclusion," Justice Finn said.
"The maker was Optus or, in the alternative, it was Optus and the subscriber," the summary said.
It was not individual subscribers to TV Now on their own who were responsible for recording the events, but Optus or a combination of Optus and the subscriber.
"Optus could be said to be the maker in that the service it offered to, and did, supply a subscriber was to make and to make available to that person a recording of the football match he or she selected," the judges found.
And further, because Optus was involved in the making of each recording, it could not invoke section 111 of the Copyright Act, which allows people to make copies of films, music and broadcasts as long as the recording is "solely for private and domestic use".
- with smh.com.au