FEDERAL COURT OF AUSTRALIA Telstra Corporation Pty Limited v Premier Media Group Pty Limited [2007] FCA 568 Australian Broadcasting Corporation v O'Neil (2006) 229 ALR 457 cited British Broadcasting Corporation v British Satellite Broadcasting Ltd [1992] Ch 141 cited De Garis v Neville Jeffress Pidler Pty Ltd (1990) 37 FCR 99 cited Hubbard v Vosper [1972] 2 QB 84 cited TELSTRA CORPORATION PTY LIMITED v PREMIER MEDIA GROUP PTY LIMITED AND NEWS DIGITAL MEDIA PTY LIMITED NSD 535 OF 2007 ALLSOP J 18 APRIL 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 535 OF 2007 BETWEEN: TELSTRA CORPORATION PTY LIMITED Applicant AND: PREMIER MEDIA GROUP PTY LIMITED First Respondent NEWS DIGITAL MEDIA PTY LIMITED Second Respondent JUDGE: ALLSOP J DATE OF ORDER: 18 APRIL 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: (1) The motion of the applicant originally brought by notice of motion dated and filed 30 March 2007 and as informally amended by a document originally entitled "Order" and which document was amended in hand to "Draft Order", which document was handed up in court on 13 April 2007 and placed on the file on 17 April 2007, and which document is attached to the reasons for judgment dated 18 April 2007, be dismissed. (2) Extend time, if extension be necessary, for the filing and service of any application for leave to appeal up to and including 26 April 2007. (3) Unless an application for leave to appeal is filed on or before 26 April 2007, the exhibits may be returned on 27 April 2007. (4) On or before Thursday, 26 April 2007, the applicant file and serve a fully particularised statement of claim. (5) The proceedings stand over for directions before the trial judge, Emmett J, on Friday, 27 April 2007 at 9.30 am. (6) That the applicant pay the respondents' costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 535 OF 2007 BETWEEN: TELSTRA CORPORATION PTY LIMITED Applicant AND: PREMIER MEDIA GROUP PTY LIMITED First Respondent NEWS DIGITAL MEDIA PTY LIMITED Second Respondent JUDGE: ALLSOP J DATE: 18 APRIL 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 These are settled reasons for judgment delivered on 18 April 2007, with one significant amendment. Since last week the applicant (to which I will refer as Telstra or the applicant) has informed my chambers that confidentiality is no longer claimed over clause 8.5 of its agreement with the NRL Partnership. I have made various textural amendments to these reasons to accommodate that. 2 I wish to express my gratitude to counsel and solicitors for both sides for the precise, thorough and expeditious approach to the hearing. My task in preparing these reasons has been made immeasurably easier by their skill and competence in putting forward the evidence and defining the issues in debate. And it has also enabled me to deliver my reasons in some respects, in particular in the introduction to the reasons, substantially by reference to the helpful submissions put forward. 3 For the reasons that I propose to give, I decline to grant the interlocutory relief sought. 4 The applicant, Telstra, operates, through a business unit known as Telstra Bigpond, a retail internet business and mobile telecommunications service. It is the exclusive licensee of the copyright in the broadcast and cinematograph film rights for national rugby league matches, insofar as such content is communicated to the public (a) via the internet, and (b) to those persons with sufficient enabled mobile telephones, (typically referred to as Third Generation or 3G telephones). 5 Telstra has held a version of the licence of those rights since 2001. The previous grant of rights was covered by an agreement entered into on 5 March 2005. It covered two rugby league seasons formally ending on 1 October 2006, though practically ending with the Grand Final early in that month. The present grant of rights is for a six year period. The present agreement commenced on 26 February 2007, coinciding with the beginning of the 2007 rugby league season. 6 The National Rugby League, or NRL, is a partnership of National Rugby League Investments Pty Ltd, a corporation owned, directly or indirectly, by News Limited, and the Australian Rugby Football League Limited. That partnership (the "NRL partnership") is the owner of the relevant copyright. It was unnecessary in these interlocutory proceedings to join these parties to the proceeding (see section 120(2) of the Copyright Act 1968 (Cth) (the "Act"). 7 Telstra's exclusive rights to use NRL footage is contained in a confidential agreement. They are delineated in some 16 agreed exclusive categories. One such category enables it to show, and it does show, full matches, but not before 24 hours after they conclude. Another allows it to show, and again it does show, highlights of unlimited length, but again, not before 24 hours after the relevant match or matches concludes or conclude. Another allows it to show highlights of not greater than five minutes of a match within that 24 hour period. It does that as well. 8 Importantly, it gains the right to operate and benefit from the NRL website. Telstra benefits commercially by "hits" to that website, and the links from it to Telstra's Bigpond website. 9 The first respondent, Premier Media Group, is ultimately owned by Publishing and Broadcasting Limited and News Corporation Limited in equal shares. It carries on a business, which includes producing pay television sports content channels for broadcast by FOXTEL, Austar and Optus on their pay television platforms, and supplying audio-visual content for the purposes of publication on the internet and via mobile phone telephony communications systems. In particular, Premier Media Group supplies audio-visual content presented as Fox Sports News, which contains audio-visual descriptions of various sporting events, including reports of rugby league matches played in the NRL competition. 10 Premier Media Group supplies Fox Sports News content, including NRL match reports to the second respondent, to which I will refer as NDM, for publication on the Fox Sports website. That website is a partnership between NDM and Premier Media Group. Premier Media Group supplies Fox Sports News content, including NRL match reports, to mobile telephony service providers; Hutchison and Vodafone, as well as Telstra (relevantly, for present purposes, to Hutchison and Vodafone). 11 This proceeding relates to Premier Media Group's provision to the Fox Sports website and to the mobile telephony suppliers, Hutchison and Vodafone, of Fox Sports News reports of NRL matches, which include audio-visual footage of those matches. 12 The 2007 rugby league season began on the weekend of 16-19 March. Five of the 25 rounds of the 2007 season have now been completed. After each of at least the first four rounds of the season, reports of the NRL matches were made available to the public from the Fox Sports website. As I have indicated, those reports were branded Fox Sports News, and were sourced from highlights packages broadcast on the Fox Sports news channel, which is available as channel 513 on the FOXTEL subscription television network. 13 As I have already said, the same content, being highlights packages originally broadcast on Fox Sports News channel as channel 513, were provided to Hutchison and Vodafone for their 3G telephony services. In Vodafone's case, that supply was pursuant to an agreement made in September 2005, although the amendment was made by letter on 2 April 2007. It is not said that that date is critical. 14 Telstra asserts that the respondents, Premier Media Group and MDM, have infringed its copyright of which it is an exclusive licensee by communicating, or authorising the communication of the Fox Sports news content containing the footage of a substantial part of the aggregate of visual images comprising audio-visual coverage of individual NRL matches over the internet and via mobile telephone systems. The copyright which Telstra asserts has been infringed is copyright in an audio-visual item, being either a film or a television broadcast of an individual NRL match. 15 There may or may not be complex title questions at the final hearing. However, the parties have limited the issues before me, at the interlocutory level, to the issue of fair dealing under s 103B of the Act in a manner to which I will come. Letters of demand were sent seeking undertakings that the impugned conduct cease. The undertakings sought were refused, principally on the basis that the case was fought - that is, that the packages represented fair dealing for the reporting of news. Ultimately, the issue in this interlocutory hearing is whether the conduct of the respondents falls within "fair dealing" for the purposes of s 103B of the Act. 16 Section 103B(1)(b)of the Act is, relevantly, in the following terms: A fair dealing with an audio-visual item does not constitute an infringement of a copyright in the item or in any work or other audio-visual item included in the item, if: (b) it is for the purpose of, or is associated with, the reporting of news by means of a communication or in a cinematograph film. 17 Telstra denies that the Fox Sports online video uses are fair dealing. Its contentions, broadly, are that the uses would not be a fair dealing, even under the long-established conventions between free-to-air or open television broadcasters. It submitted that now the sophisticated state of the allocation of media rights, and the unique circumstances of the availability of continuous on-demand content on the internet, mean that "old world" accommodations about the use of copyright material by rival television broadcasters do not constitute an appropriate approach to the question of fair dealing in the so-called digital age. 18 It asserted that it was incontrovertible that Telstra has paid a considerable sum of money for its NRL media rights and other sponsorship entitlements, and that the provision of on-demand highlights packages by rival producers of internet and mobile phone content, cross the line into unfairness. 19 To succeed in its interlocutory claim for relief, Telstra must make out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at the trial in the action Telstra will be held entitled to relief. The balance of convenience must also favour the grant of interlocutory relief sought. These propositions have recently been emphasised by the High Court in Australian Broadcasting Corporation v O'Neil (2006) 229 ALR 457. At this point, the facts need a little more explanation. 20 Premier Media Group is the exclusive licensee of what can be conveniently referred to, as it was by the applicant in its written submissions, as the exclusive licensee of the pay TV slice of the rights in NRL audio-visual footage. Publishing and Broadcasting Limited, a half-owner of Premier Media Group, has the so-called free-to-air slice. The other half-owner of Premier Media Group, News Limited, through its subsidiary, National Rugby League Investments Limited, half owns the NRL, which has been responsible for licensing out these rights. It was submitted by Telstra that in a so-called fully negotiated, high-priced deal, the NRL partnership licensed the new media slice, so-called - that is, internet and telephony - to Telstra in an agreement under which Telstra also became the six-year sponsor of the NRL Partnership's rugby league competition. 21 These facts, in particular, expressed in this way - that is, in a manner taken from the applicant's submissions - were relied upon by the applicant to show that it had paid for a significant grant of a body of rights. That proposition was, in effect, the premise for the applicant's complaint that the grant to it was being derogated from by the respondents and, through them, indirectly, those that controlled the respondents, who also partly controlled those who supplied the grant. In evaluating this submission of derogation from grant, the terms of clause 8.5 of the agreement between the applicant and the two members of the NRL partnership should be borne in mind at all times. 22 That clause is in the following terms: Nothing in this agreement limits or affects Telstra's rights or the rights of any other person to communicate or disseminate the NRL Matches or any other NRL Content in accordance with any statutory or common law rights including, without limitation, fair dealing rights under the Copyright Act 1968 (Cth). 23 Although it can be said without question that the applicant has paid a large sum of money for its rights, which are valuable commercial rights in an area vital to its business operation, it must be recognised that it took those rights pursuant to the totality of the terms of the agreement, including clause 8.5. Emphasis was placed by the applicant on the corporate relationships involved. The applicant submitted that the NRL has taken Telstra's money for the agreement, and it takes its money in annual instalments. It was submitted that those moneys are a vital revenue source for the rugby league partnership and its competition. That can be accepted. It was emphasised that for that money the applicant had bought exclusivity for new media from the NRL, half-owned by News Limited, yet Premier Media Group, half-owned by News Limited, and another wholly-owned News Limited company, NDM, take back with one hand what its intimate corporate relations have sold with another. 24 It is necessary to remove, however, the rhetoric from the analysis of the issues in this case. The respondents are entitled to conduct themselves in accordance with the law reflected by s 103B of the Act. No informed commercial entity, advised by competent lawyers, as no doubt all these parties were at all relevant times, would have misunderstood the effect of s 103B as a law of the Parliament. It may or may not be that the parties could amongst themselves contract so to behave as if s 103B were not present in the Act. That point has not been argued. It is not a foundation for the applicant's case. 25 There is no dispute on this application that the footage used in each Fox Sports news report on each NRL match represents a substantial part of whatever copyright might subsist in the total footage of an individual match. The respondents say, however, that the relevant footage was a fair dealing with an audiovisual item for the purpose of or associated with the reporting of news by means of a communication, and hence within s 103B(1)(b). 26 The reports presented on Fox Sports news reports include a so-called voiceover, describing the incidents in each match, and linking truncated match footage excerpts, if one wishes to call them highlights, pertinent or relevant to what is being said in the voiceover. The evidence indicates that these reports are placed on the internet or are available on the telephony for a period of about 48 hours after being put up which is about 48 hours after the matches on the highlights. The evidence is not precise as to when, in relation to each of the numerous videos put into evidence, the items were first put up, but that precision is unnecessary to deal with, and the argument did not rest on the material being up for 48 or 50 or 46 hours, as can be seen from the reasons that follow. 27 The length of each of the footage in relation to each match covers a range of times but the longest were somewhat over two minutes of footage from the match. Some of the footage excerpts were considerably less than that, but counsel for the respondents, in effect, has been content to argue the application on the basis of two-minute footages, which is close enough to the longest of the footages to have the application dealt with on a case most unfavourable to his clients. It is to be recalled, of course, that subject to additional time for stoppages and injuries and the like, each game of rugby league will last for 80 minutes, consisting of two halves of 40 minutes. Therefore, together with those times of stoppage and the like, the total footage of the match would be in the order of one and a half hours. 28 The impugned communications are of a self-styled news program. They are part of a sports program and contain, as I said, for want of a better expression, highlights of the matches recently played in the competition. What I have described as the voice-over, is a separate commentary overlaying over the original audio visual feed. Sometimes the original commentator intrudes at appropriate moments. Generally speaking, the tries and other major events of the game are shown and commented upon. Generally the tries and other major events of the game are shown sequentially and depending on the game for up to about two minutes per game. As I have already said, the sports news show is taken from Fox Sports pay TV and is available for about 48 hours after its first appearance on the Foxsports website or from first available telephony, both shortly after the games in question. 29 Thus, depending on when it is put up, whether on Friday night or early Saturday morning, the program showing the Friday night football may well be still available to be viewed at some time on the Monday. The parties tendered a large volume of audio visual footage of various games that can be found in the evidence. I do not propose to analyse the footage in any detail. I have watched sufficient of it to allow me to reach my conclusions for this interlocutory hearing. I am not unfamiliar with watching the game of rugby league on television and the parties have approached the matter, as I would apprehend it, on that footing. 30 A number of things can be said about the impugned footage. First, it was not contested that these events were newsworthy. To a not insignificant section of the population, they are of some importance as news. Modern news journalism relies upon adequate visual images. Common sense allows me to draw the conclusion that this is not only a commercial attribute of news journalism, but is something the viewing public have come to expect. That public interest is protected by s 103B of the Act. Secondly, it was not in contest that a substantial part of the relevant copyright communications, that is the audio visual item, has been taken. As I have already said, the issue is the fair dealing with the audio visual item for the purpose of or associated with the reporting of news by means of the communication. 31 The evidence reveals that in other media, that is free to air television and pay television, there has been over the years, the use of audio visual footage of a similar nature to the impugned program. Examples include past and present programs, such as Channel 10's "Sports Tonight", SBS's "World Sport" and "World Game", Channel 9's "AFL Footy Show" and Channel 7's "Sportsworld" and "Sportswatch". 32 Similarly, pay television had broadcast news services that include sporting news, for instance, "SKY News". The respondents submitted that it is an integral part of free to air or pay television news services to report on events by showing relevant video footage of a particular sport, such as rugby league. Just as events are covered in written match descriptions in print media. Fox Sports News is a species of that form of sporting news which has for many years been shown on Australian television, and I accept those submissions. 33 It is unnecessary to compare minutely the length of time taken in these examples of other media, given the respondents' evidence as to the impugned broadcasts. It may be, and I do not make a finding about this now, that even by these standards, that is the standards of pay television and free to air television, it will be found, that the respondents have, to put it bluntly, been a little greedy in what they have taken for the dealing to be fair as well as newsworthy. Ultimately, that will be a matter of judgment and impression, see British Broadcasting Corporation v British Satellite Broadcasting Ltd [1992] Ch 141 and Hubbard v Vosper [1972] 2 QB 84 and other cases. It is not clear to me that that judgment ought be made, that is, that there has been a taking of too much by reference to the benchmark of free to air and pay television. As I said, it is unnecessary to pursue this judgmental analysis given the way the matter has been argued. My doubts and uncertainties about whether what has been done, goes beyond fair dealing, is strengthened by some evidence concerning the approach of Telstra itself in negotiating with the Australian Football League (the "AFL") in December 2005. Telstra in those negotiations was seeking to reach agreement with that other sporting code about the same kind of rights that it has been able to extract by agreement from the NRL. 34 Telstra approached that negotiation for internet and mobile phone rights, from the AFL in the following way. It sought to make clear to the AFL that involved in the negotiations for the price, was a recognition by Telstra that others would take highlights packages under the fair dealing provision. Some numbers were placed on this recognition and exhibit 10, being an email from Mr Davis of Telstra to a gentleman from the AFL, said that the fair dealing – that Telstra would recognise, others would take, thereby undermining the utility of any grant, would be one minute per quarter and two minutes "at end of game". The email went on: Given this assumption we believe that a meaningful exclusive highlights package for broadband and mobiles would be four minutes per quarter and eight minutes at end of game. 35 It goes without saying that the central consideration in the negotiation of any of these contracts for these rights, is the price. Telstra was approaching that negotiation on the basis that – in December 2005, that it would work on the basis that others could take "two minutes at end of game". Of course, as it was submitted, this was a negotiation, but a negotiation between, I would confidently infer, skilled and knowledgeable participants in the industry. Commercial men and women may well, as they would be expected to, put their best foot forward in negotiation; but I think I can safely infer that they rarely do so by putting unsustainable propositions knowingly to negotiating correspondents. Mr Cobden submitted that the industry had moved on from December 2005 and that the accepted negotiated highlights rights, as a matter of property between the parties had reduced from eight minutes at end of game, to about five, reflected by the agreements of this case. Thus, he said what was fair dealing in the news reporting had reduced from two minutes at game end. I am not persuaded by that. 36 I accept that there will be a substantial issue on a final hearing as to the operation of the internet and mobile phones and telephony, including the nature and character of their structure, and how the public use them. This will be important in the assessment of fairness in the fair dealing, in the use of audio-visual footage and in the delivery of news. At an interlocutory level, however, I am simply not persuaded that there is a case to distinguish delivery of such programs on the internet and telephony from free-to-air and pay television, bearing in mind the clear conduct of Telstra in negotiating the AFL bargain in December 2005. 37 The orders sought on an interlocutory basis really require a conclusion of a clear difference between the different types of media to be drawn; that is, the orders sought by Telstra on this application require a clear distinction between free-to-air television and pay television on the one hand, in respect of fair dealing in this context, and the internet and telephony on the other, in this context. The orders, that are sought are annexed to these reasons. 38 In those orders, there is an attempt to overcome the necessary difficulty in framing an order by way of quia timet injunction, to restrain future breaches of the fair dealing provision, on the premise that some breach of the fair dealing provision has been shown. The difficulties inherent in drawing such an order can be easily understood by a reflection on the nature of the right given by s 103B. Notions of fairness in dealing in a news reporting or associated with a news reporting, are not easy to govern by a priori rules laid down in advance. 39 It would be easier to make those orders in advance if there had been displayed sufficiently contumelious conduct, which enabled a conclusion to be drawn that a respondent had shown such disregard for rights of the applicant that a broad and sweeping approach could be taken in the framing of orders until the final hearing of a matter, in order to protect the rights of the applicant. That, in a sense, is what the applicant claims here. Mr Cobden in address, and the applicants in written submissions, have used a degree of rhetoric which I do not accept is warranted. That is not intended as a criticism of Mr Cobden or any of the legal representatives of the applicant. 40 It is said to ensure that it can be understood that before a court makes orders drawing bright lines in advance in a fair dealing case, a degree of clarity of breach and a degree of contumelious disregard of rights is probably required to be shown. That is not said as a rule, and it does not govern my conclusions here. It is said by way of illustration of the difficulties facing the applicant in framing an order in advance. 41 That can be seen when one compares what has been displayed in the evidence as, for want of a better expression, the usual "freight" in free-to-air or pay television for these kinds of rights. Sequential highlights with a voice over of one to two minutes would not be seen as necessarily entirely out of order in pay television and free-to-air television. It would be important to understand how frequently they were repeated; nevertheless, the evidence displays that television shows of a kind to which I have already referred use highlights in that way. 42 What is sought here is an order in advance of any further broadcasts that no more than 45 seconds of footage from each match be taken, and no more than 90 seconds of defined protected NRL match footage is made available in all such reports. The entitlement to 90 seconds "in all such reports" I have taken to be a reference to the total for the weekend. Perhaps it is a total for any particular show. Whichever is correct, it reveals that the criteria for fairness in the orders, by way of protection in the interim until a final hearing for the applicant's rights, is not taken inductively from free-to-air or pay television usage. 43 In all the circumstances, the evidence that I have referred to, and the evidence which has been put before me, I am not prepared to conclude that there is a reasonable prima facie case that that injunctive relief would be granted. 44 I think that it is arguable, though I am not making a finding on it, that the outer limits as to what is fair dealing, by reference to other media, has been engaged in, and I would be prepared to accept that there may be a serious case for trial as to whether or not, in any particular piece of footage, that that line may have been overstepped. In other words, I think the broadcasts can be seen to be similar in length to those that have been shown on free-to-air and pay television; but it is arguable that, on a careful analysis and considering all relevant matters, someone could conceivably come to the view that the broadcast was somewhat longer than needed for fair dealing for the reporting of news. 45 Those are not views that I have formed. They are merely a recognition that there could be debate about the outer limit of the use of these audio-visual footages for up to and, in some cases, over two minutes. However, it would be arguable either way, in my view, as a matter of impression. 46 The view that that kind of argument is available does not, however, lead me to conclude that I should make orders in the form requested. At the moment, I do not see, unless I were instructed by different evidence, how internet and telephony are so different from free-to-air and pay television. Of course, there is no need to have viewers come to their screens at a fixed time for this news. Those viewers can, as it were, foregather individually at their own machines or telephones, wherever they are, during the relevant 48 hours; and they can watch, and re-watch the news programs. Leaving aside any debate about copying, in a practical sense, so can television viewers, with simple recording devices - that is, watch and re-watch what they want to. 47 A more detailed and thorough investigation of these kinds of matters at a final hearing may well lead to a conclusion that there is a fundamental difference between free-to-air and pay television, on the one hand, and telephony and internet on the other, but for today's purposes and the purposes of this application, I am not prepared to draw that conclusion, which I think is necessary to be prepared to grant relief in the terms requested. 48 I should say at this point that what commercial participants in any given industry think is fair is unlikely to be necessarily determinative of the issue of fair dealing. However, if it can be shown that there is, or has been, a general view about the legitimacy of a certain length of use of audio-visual footage, that will certainly be a relevant consideration to fairness. However, ultimately, what is fair dealing in news reporting is a question of judgment and impression which takes into account the public interest inherent in s 103B as a law of the Parliament. 49 I agree with the submissions of the respondents that the question, either at an interlocutory or a final level, is not resolved by the Court determining what is a bare minimum, which enables news to be reported. It is a question of fair dealing, and I think the orders sought really reflect the paring back to a bare minimum of what could be done to report news. 50 The use of up to two minutes, or thereabouts, of this footage by the respondents does not deprive Telstra of the valuable right to show five minutes or more of highlights, which can be done in a less halting and less fractured way than can be seen on these news footages. Nor am I prepared to accept that 24 hours is the limit of news in this field. The respondents use approximately 48 hours. It does not seem to me that that is in any way trespassing on an activity beyond the delivery of news. The competition takes place in what might be called an extended weekend from Friday night to Monday night. Not everyone works from Monday to Friday, with Saturday and Sunday off, with full access to their newspapers and televisions. A great many of the community work shift work, and work odd hours. I do not see that it is arguable that past 24 hours notion of news is exhausted. 51 There was a separate and distinct argument that the provision by Fox Sports News to third parties, Hutchison and Vodafone, precludes a fair dealing defence. This was based on the news clippings case, De Garis v Neville Jeffress Pidler Pty Ltd (1990) 37 FCR 99. The applicant, in this connection said that the respondents were simply broking or selling content, not delivering news. That point may be made good on a final hearing; at this point, I am not persuaded that that conduct - that is, the on-passing of the Fox Sports News to the third parties - is not a fair dealing associated with the reporting of news by Vodafone and Hutchison for the purposes of s 103B(1)(b). 52 I turn to the balance of convenience. I am prepared to accept that if I am not to grant interlocutory relief, and if the respondents have overstepped the mark on fair dealing, real and substantial impairment will occur to the applicant's rights. Some evidence was given in a form which I did not find satisfactory and which I rejected. However, I am prepared to approach the application on the basis that the respondents exceeding their entitlement under s 103B would cause a real impairment of valuable commercial rights to the applicant. Whether this is in any way permanent or otherwise irreparable may perhaps be doubted. If there has been infringement, the profit derived by the respondents from Hutchison and Vodafone would be readily able to be ascertained. Any difficulty in that ascertainment would almost certainly work against the respondents rather than in their favour in accordance with well-understood principle. And as to the use by the respondents themselves on the Foxsports website, a putative licence fee could, no doubt, be calculated. 53 On the other hand, if I grant an injunction and if it turns out that the applicant fails, whilst there would be an undertaking as to damages the interference with the businesses, not only of the respondents but also Hutchison and Vodafone, would be extremely difficult to quantify. The respondents, Hutchison and Vodafone, would not have the ability to call upon the kind of account of profits that the applicant would if the reverse were the case. Further, the nature of the status quo ante favours, in my view, withholding any relief. The evidence reflects that the footage of NRL matches on internet and mobile phones in 2007 is at least comparable to that which occurred in 2006. 54 The respondents and Vodafone and Hutchison have not, to use the colloquial, sprung a massive surprise upon Telstra by their conduct. I should add at this point that I am not referring to this matter in the context of delay. I do not consider that I should conclude that Telstra has sat on its hands or delayed in any relevant way. Rather, I make the point only to say that the businesses of the respondents, Vodafone and Hutchison, have been premised, one can assume, on this activity continuing. Whilst the Fox Sports website was substantially rearranged and intended to be improved in October 2006 and it appears to have provided since that point a more significant commercial threat to Telstra, its activities, the subject of complaint, do not appear to have changed markedly from that which was done in 2006 in respect of the relevant impugned activity. 55 The form of orders sought is another factor, in my view, militating against relief. That is not a criticism of the drafter of those orders. They are not, in my view, as I think I have already said, a legitimate response to any possible over-reaching of the fair dealing defence. And I have already indicated that they really are premised on what I have found is not the case – an unconscionable or contumelious attitude to the respective parties' rights by the respondents. 56 Taking into account my view of the lack of strength of the prima facie case and all the elements of the balance of convenience I am not prepared to make the orders sought. 57 The above deals with that which is necessary to dispose of the application. The following particular matters in response to individual arguments perhaps should be put. It was submitted that there was a complete concentration by the respondents' witnesses on news and nothing on the fairness of the dealing and that there was no illustration of any careful and cautious approach necessary to the operation of fair dealing. It was said that it was unlikely that considerations of fair dealing would have intruded in the making of a program by a legitimate rights holder for pay television. If I may say, without the slightest disrespect to counsel, whilst this is a good rhetorical starting point, it does not substitute for analysis of the impugned conduct, nor does it outflank the conclusions that I have drawn by looking at that impugned conduct in the evidence. 58 Also there was said to be an infection of Mr Marquard's evidence by the use of the defined phase "Sporting News". There was a definitional technique used in the affidavit which was the subject of some debate and argument on admissibility. Without intending to be critical of those who attended to the drafting of the affidavit and recognising that these matters needed to be put together in an urgent fashion the use of defined terms in sworn evidence is, except in uncontroversial aspects, likely to be productive of a difficulty, not only for the admissibility, but also potentially for the witness who has to swear to the evidence. It is a technique that should be avoided. That said – and I emphasise not by way of criticism of those who drew the affidavit – I do not think that those difficulties which did exist in some parts of Mr Marquard's evidence affect my conclusions which are, in a significant part, drawn from the objective facts of the footage and not based critically on his definitions. 59 The applicant's submissions referred in paragraph 27 to questions of goodwill and emphasis was placed on a number of factors: the potentially fickle nature of the viewing public, the viewing public's propensities to form habits of viewing, the need to build audiences over a season, the very large amounts of money invested in the rights and the very real importance that all parties place on the on-line environment as a primary point of consumption of audio-visual material. These were all said to be matters strongly pointing towards the balance of convenience favouring the grant of properly framed interlocutory relief. There is a premise in that and that is the strength of the prima facie case. Also I think one needs to place against those considerations, not so much countervailing considerations as complementary considerations, such as the ease of changing allegiance in media, the power of advertising, the capacity of the respondents to pay an account of profits. Further, fickleness in the public which, for present purposes, can be perhaps accepted, is likely to work against any inertia of goodwill. 60 All these are matters which can legitimately be canvassed in a debate about the commercial goodwill in a nascent, though extremely valuable, sector of the communications industry. However, I am not persuaded that in the light of the evidence related to the prima facie case that those matters should convince me to grant interlocutory relief. 61 As I said previously, I do not take into account delay. I do not think it fair to Telstra to say that they have delayed. They did not take action last year. There may have been good reason for that. After the final whistle of the Grand Final last year there was little standing to be complaining about the October revamped website. It was not until the negotiation of the 2007 rights and the consummation of that negotiation into contract that they had a basis to bring the matter to Court. They did so tolerably promptly and I do not think delay is a relevant consideration. 62 As to the question of costs, Mr Murray, on behalf of the applicant, seeks an order that the respondents' costs be costs in the cause. Mr Bannon, on behalf of the respondents, seeks an order that the respondents have their costs of the motion. I think, in all the circumstances, based on the conclusions that I have reached, and in particular my views about the prima facie case, that though it is finely balanced, I think in all the circumstances I should accede to the proposition that the respondents should have their costs of the motion. My view would be certainly different if the result had turned on a more finely tuned weighing of the balance of convenience, but I have examined the balance of convenience on the premise of the view that I have come to, that in all the circumstances the prima facie case is as I have described it. In those circumstances, the order of the court will be that the applicant pay the respondent's costs of the motion, and I make the other orders that I have identified. 63 In all those circumstances, the orders that I make, are as follows: (1) The motion of the applicant originally brought by notice of motion dated and filed 30 March 2007 and as informally amended by a document originally entitled "Order" and which document was amended in hand to "Draft Order", which document was handed up in court on 13 April 2007 and placed on the file on 17 April 2007, and which document is attached to the reasons for judgment dated 18 April 2007, be dismissed. (2) Extend time, if extension be necessary, for the filing and service of any application for leave to appeal up to and including 26 April 2007. (3) Unless an application for leave to appeal is filed on or before 26 April 2007, the exhibits may be returned on 27 April 2007. (4) On or before Thursday, 26 April 2007, the applicant file and serve a fully particularised statement of claim. (5) The proceedings stand over for directions before the trial judge, Emmett J, on Friday, 27 April 2007 at 9.30 am. (6) That the applicant pay the respondents' costs of the motion. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 26 April 2007 Counsel for the Applicant: Mr R Cobden SC with Mr N R Murray Solicitor for the Applicant: Mallesons Stephen Jaques Counsel for the Respondents: Mr A J L Bannon SC with Mr J M Hennessy and Mr A R Lang Solicitor for the First Respondent: Baker and McKenzie Solicitor for the Second Respondent: Allens Arthur Robinson Date of Hearing: 13 and 18 April 2007 Date of Judgment: 18 April 2007 In the Federal Court of Australia ) No NSD 535 of 2007 New South Wales District Registry ) Telstra Corporation Limited (ACN 051 775 556) Applicant Premier Media Group Pty Limited (ACN 065 445 418) First Respondent News Digital Media Pty Limited (ACN 000 529 457) Second Respondent DRAFT ORDER Judge: Allsop J Date: 13 April 2007 Where made: Sydney [In this Order: Agreement means the NRL New Media, Naming and Sponsorship Agreement between Telstra and the National Rugby League which is Confidential Exhibit JBR-2 to the affidavit of Jean-Baptiste Rousselot sworn 30 March 2007. NRL Matches means all (a) regular season Telstra Premiership matches with all clubs contracted to the NRL; (b) final series Telstra Premiership matches; (c) grand final Telstra Premiership matches; (d) State of Origin matches; (e) City vs Country matches; (f) National Youth Competition matches (if and when that competition commences, but only if Telstra exercises its right to commercialise those matches); and (g) domestic test matches involving the Australian Kangaroos team including Tri-Nations Matches (but not including the World Cup); during the term of the Agreement. Protected NRL Matches means matches and match highlights in respect of which the Applicant is granted rights under the Agreement.] THE COURT ORDERS THAT: 1. On the Applicant giving the usual undertaking as to damages, the Respondents and each of them, whether by themselves, their servants, agents or otherwise, be restrained until further order from: (a) communicating or authorising the communication to the public of the whole or a substantial part of any broadcast or cinematograph film of Protected NRL Matches by: (i) making such content available on-line; or (ii) distributing (including disseminating, communicating, transmitting or supplying) any such content over the Internet to the public; or (iii) distributing (including disseminating, communicating, transmitting or supplying) any such content to mobile telephones or similar portable handheld small screen devices usable as telephones, other than via the Digital Video Broadcast - Handheld Protocol; ("the New Media Uses") (b) directing, assisting or procuring any other company or person to engage in any of the conduct sought to be restrained by sub-paragraph (a) above. 2. In respect of the NRL Matches referred to in paragraph (a) of the definition, it will not be a breach of Order 1 for the respondents or either of them to communicate or authorise the communication to the public for New Media Uses of extracts from broadcasts or cinematograph films of Protected NRL Matches in one or more reports of one or more matches in a round of NRL matches that: (a) use no more than 45 seconds footage from each match; and (b) is available for not more than 24 hours after the conclusion of the earliest match referred to in the report; and provided that not more than a total of 90 seconds of Protected NRL Match footage is made available in all such reports. 3. Costs.