Sky Network Television v Fairfax New Zealand copyright infringement case may not be over yet

Article  \  14 Sep 2016

In this article we report on the latest development inSky Network Television Limited v Fairfax New Zealand Limited[2016] NZHC 1883 (12 August 2016).

The case, which was lodged three days into the Olympics, claimed Fairfax New Zealand had infringed the exclusive media rights that Sky Network Television (Sky) had to Olympics Games coverage. Sky also sought an interim injunction to limit the content that Fairfax could broadcast for the remainder of the games.

This is an interesting case because, although Sky applied for an interim injunction, not many ‘fair dealing’ cases make it to court in New Zealand. The most recent was in 2007 and it also involved Sky. Justice Fogarty decided not to refer to the decision for precedent value because, he noted, ‘much has changed in the past nine years’, and public demand for current news reporting was much higher now than it was in 2007.

Sky had entered into an exclusive media rights agreement with the International Olympics Committee (IOC), allowing them to broadcast and exhibit footage of the Olympic Games in New Zealand exclusively. Outside of this, the IOC allows media organisations to sign up to ‘News Access Rules’ (NAR) so they can be an accredited media organisation at the Olympics. Under Sky’s agreement with the IOC, they had the power to issue ‘Supplementary News Access Rules’ (SNAR) to local media in New Zealand. These were slightly more favourable than the IOC’s NAR.

The use of NAR/SNAR is commonplace in New Zealand and internationally. They are designed to stop the ‘fair dealing’ defence against copyright infringements. In this case, the SNAR created a ‘safe harbour’ around the length and frequency of Sky’s broadcast material if a media organisation wanted to use it when reporting on the Olympic Games.

Sky had offered the SNAR to major New Zealand media companies including Fairfax, TVNZ and MediaWorks and the latter two had accepted them. Fairfax, however, refused to sign up and went ahead with streaming edited footage from Sky’s broadcasts of the Olympic Games on its website

This attracted a complaint from Sky which started copyright infringement proceedings against Fairfax three days after the Olympics started. Sky also sought an interim injunction against Fairfax to limit the content that it could stream for the remainder of the games.

Fairfax went on to deny the claims and said that it was protected by the defence of ‘fair dealing’ which means that the footage does not infringe copyright since it was reporting current events by video.

The ‘fair dealing’ defence ensures that the IOC and Sky allow some copying of the material for the purpose of reporting current events. This is not a significant obligation and Justice Fogarty noted that it is in both of their interests for there to be reporting of newsworthy events to encourage and maintain viewer participation in the Olympic Games.

Sky’s SNAR allowed the use of six minutes of Olympic material per day. It could only appear in a video highlights package as a news bulletin update, with no more than three bulletins per day. Each bulletin could contain no more than two minutes of Olympic material and each bulletin had to be at least two hours apart. The Olympic material of a specific event could only be broadcast 30 minutes after the conclusion of the live event.

The Court accepted that Fairfax’s use of the footage was in excess of what was permitted by the SNAR. Sky particularly didn’t like Fairfax’s website feature that enabled a user to view edited footage of a particular Olympic event sandwiched in between advertising material. The patient user, who waited for the second advert to end, could then access other previously uploaded Olympic material that had not been taken down from the Stuff website via an automatic playlist feature. This meant a user could potentially access in excess of six minutes’ worth of Olympic highlights on any given day via the Stuff website.

The Court also accepted that the question of what was ‘fair dealing’, wasn’t something that could be resolved by any interim remedy. The Court was not in a position to create a bright-line rule to measure what or wasn’t fair dealing. However, it did consider that this feature of Fairfax’s reporting was a significant and blatant deviation from what was considered acceptable under the IOC NAR or Sky’s SNAR.

Justice Fogarty indicated that for such a gross deviation from the NAR/SNAR he would have seriously considered granting an interim injunction. However, none was needed, as on the third day of the hearing, Fairfax advised the Court that it had disabled this feature and had accepted that such a feature could not be defended as ‘fair dealing’.

With Fairfax taking this step, it stopped any formal orders from the Court. They were left with a warning that if conduct resumed, Sky would be able to seek a mandatory injunction at short notice.

Since the decision was issued, Sky has announced that it will take the matter to full trial in order to get some clarity around what ‘fair dealing’ means.