"Broadcast" rights do not cover internet streaming rights, says Australian Court

The Supreme Court of New South Wales has delivered an important decision that live internet streaming is not "broadcasting" within the meaning of a program supply agreement. This decision is commercially significant for all businesses which license content for distribution in Australia.  

In brief

On 28 April 2016 the Supreme Court of New South Wales delivered its judgment in WIN Corporation Pty Ltd v Nine Network Australia Pty Limited [2016] NSWSC 523. The Court held that live internet streaming is not "broadcasting" within the meaning of the parties’ program supply agreement.

This decision is commercially significant for all businesses which license content for distribution in Australia. The scope of rights needs to be clearly defined in a licence agreement. The construction of a contractual term depends on the particular contract in issue and its surrounding circumstances. Given this, it is possible that a different outcome could be reached in a different case.

Facts

In brief, regional broadcaster, WIN, commenced legal action against national broadcaster, Nine, in early February 2016, claiming that Nine was breaching its supply agreement with WIN because Nine's new live streaming service, 9Now, meant content was no longer exclusive in the regional broadcaster's service areas.

WIN alleged breach of a contractual clause which provided, in part:

‘Nine grants WIN the exclusive licence to broadcast on and in the licence areas covered by the WIN Stations the program schedule broadcast by Nine …’ (emphasis added).

Decision

The Court (Hammerschlag J) held that the term "broadcast" meant free-to-air broadcast only, for two reasons. First, the reference to the ‘licence areas’ in the relevant clause could only be a reference to free-to-air broadcasting given that the relevant licences covered free-to-air only. Secondly, at the time the agreement was entered into, Nine was not in a position to grant internet streaming rights to WIN in relation to all content the subject of Nine’s free-to-air television broadcast. This factor was found to militate against construing the licence to include internet streaming rights.

Nine sought to rely on extrinsic evidence of the parties’ discussions about the program supply agreement. In accordance with established contract construction principles, the Court rejected the admissibility of this evidence.

Importantly, the Court held that if WIN had been successful:

• the Court would have granted an injunction to prevent internet streaming by Nine in WIN’s service areas. This was despite Nine’s contentions that it would not be able to block internet streaming only to those areas and therefore all internet streaming would cease, and
• some damage would be suffered by WIN, for which Nine would be liable.

WIN has 28 days in which to appeal the Court’s decision.¹

This article was written by Philippa Bergin-Fisher, Senior Associate and Sarah Slater, Solicitor, Sydney.

Endnotes

1. WIN Corporation Pty Ltd -v- Nine Network Australia Pty Limited [2016] NSWSC 523.