Patrick McGrath

BA,LLB(Hons) MComLaw(Hons)
Patrick McGrath

Phone +64 9 300 1257
Mobile +64 21 619 540

Vulcan Building Chambers
Level 4 Vulcan Buildings
Cnr Vulcan Lane and
Queen St

PO Box 3320
Auckland 1140
New Zealand

An Olympic Event in Auckland:

Sky v Fairfax - Copyright and fair dealing

During the first week of the Games in Rio, not everybody would have noticed another Olympic contest taking place in the High Court at Auckland.  Sky Network Television, as licensee of the right to broadcast the Olympics in New Zealand, brought an injunction application seeking to curtail the streaming of Olympic film by Fairfax New Zealand on Fairfax’ website

Fairfax defended the injunction application, arguing that its use of the content was “fair dealing” for the purposes reporting current events and was, therefore, authorised under New Zealand’s Copyright Act 1994.

What is fair dealing?

First, a bit about fair dealing. For as long as a concept of copyright has been known to the law, there have been exceptions to the right to enforce copyright ownership against those dealing “fairly” with the work of a copyright owner.  Going back to the times of the Statute of Anne of 1709, which first conferred a right of copyright on authors, the English courts recognised a right of “fair abridgment” and a right to review, including quoting from the reviewed work.
In New Zealand today, the Copyright Act 1994 allows copying of a copyright work where such copying amounts to fair dealing with the work for the purposes of:

            Criticism or review of the work or another work;
            Reporting current events; or
            Research or private study.

The fair dealing exceptions are there to protect fundamental rights and freedoms, such as freedom of expression and the right to be informed.  It’s pretty hard to critique something if you can’t mention it without breaching the author’s copyright.

But how much copying amounts to fair dealing, and in what circumstances, is not defined. It will always be a matter of impression, as Lord Denning said in Hubbard v Vosper,

“It is impossible to define what is ‘fair dealing’.    It must be a question of degree.  You must consider first the number and extent of the quotations and extracts. Are they altogether too many or too long to be fair? Then you must consider the use made of them. If they are used as a basis for comment, criticism, or review, that may be a fair dealing. If they are used to convey the same information as the author, for a rival purpose, that may be unfair. Next you must consider the proportions. To take long extracts and attach short comments may be unfair. But, short extracts and long comments may be fair. Other considerations may come to mind also. But, after all is said and done, it must be a matter of impression.” 1

Fair dealing under threat in the digital age

The ability today to quickly and easily copy, transmit, upload, download, manipulate, or link to a site masses of information, often anonymously, represents a serious danger to copyright owners’ interests. This has resulted in lobbying to strengthen owners’ rights through legislation, such as the Trans Pacific Partnership which would require NZ’s Copyright Act to be amended to extend the period of copyright from 50 years plus the life of the author, to 70 years plus the life of the author.  Copyright owners have also fought online copying through contract and the use of technology (digital rights management systems) to prevent unauthorised access, meter access to enforce pay-per-view business models, and track unauthorised use to specific computer terminals if not to the actual user.

Such developments have led to concerns among copyright users that access to and copying of works is being restricted where such use would be permitted on ordinary fair use principles.

Sky v Fairfax

The Sky v Fairfax case took place against a background of those tensions. 

Sky, as licensee in New Zealand from the International Olympic Committee (IOC), had entered into agreements with various other media organisations allowing them to broadcast snippets of the Olympics according to News Access Rules (NARs).  The NARs permitted the playing of a total of six minutes of Olympic material per day, only in highlights packages designed as news bulletins, with no more than three bulletins per day. No more than two minutes of Olympic material could be played in any one bulletin. Each news bulletin had to be separated by at least two hours, and Olympic material was only to be broadcast at least 30 minutes after the relevant live event.

The NARs were designed to fulfil Sky’s fair dealing obligations, and of course allowing a certain amount of the Olympics to be played in this way would drum up further interest, to the benefit of Sky and the IOC.

Fairfax refused to sign up to the NARs and began playing Olympic film on to a greater extent than permitted under the NARs, including an automatic playlist function. The automatic playlist function involved video relevant to a particular news item being played. Then, after some advertising, the user could watch another video or videos relevant to previous news items which had not been taken down.

Sky sought an interim injunction on the third day after the Olympic opening ceremony, seeking to limit Fairfax’ use of Olympics content until the matter could be finally determined at trial.  As such Sky needed to show that:

There was a serious question that Fairfax’ use of the material was not fair dealing for news reporting purposes and that, therefore, Fairfax was breaching copyright; and

The balance of convenience favoured Sky being granted its interim injunction until trial.

After a two-day hearing and evidence including:

Most other media organisations signed up to the NARs. Some reluctantly, some thought they were reasonable;

Evidence from Sky to the effect that the NARs were consistent with industry standards as to fair dealing to report news; and

Various tables of the NAR rules in New Zealand and comparative tables of the New Zealand and UK rules as applied at the time of the London Olympics,

His Honour Justice Fogarty was strongly of the view that the automatic playlist function raised a serious question as to breach of copyright.  Fairfax disabled that function during the hearing.

That left the Court to rule on Fairfax’ less contentious activities, Sky having pressed on with its injunction application after the automatic playlist function was disabled.  As to those other activities, His Honour stated that the Court during the hearing did not have a reliable understanding as to the extent of use by Fairfax of Olympic or Sky material, but that there was no dispute that it was outside the bounds of the NARs.

In the end, following an Australian case involving footage of NRL games, 2 His Honour accepted the argument for Fairfax that it was not “justiciable on an interim injunction hearing to decide whether or not that conduct goes beyond the fair dealing exception in the Statute.” As Sky had not established that there was a serious question to be tried its injunction application failed.

So who got the gold?

Both sides could claim victory, and both did in the media.  Fairfax had to disable the automatic play function as a result of Sky bringing the injunction application, after the Judge told them to “behave”. But then Sky’s injunction application was denied as to the rest of Fairfax’ streaming.  Recognising this the Judge commented that working out which side should have legal costs would be “complicated” and His Honour urged counsel to try to reach agreement on that issue.

An interim hearing only, but in the result industry standards as to what amounts to fair dealing were more or less enforced. The orders made probably have decided the issues between these parties as it seems unlikely that Sky will take the matter to trial and seek damages, but watch this space.

Patrick McGrath
19 August 2016

1 [1972] 2 QB 84, 94.

2 Telstra Corporation Ltd v Premier Media Group Ltd [2007] FCA 568.