SKY Network Television : PLEASED THAT THE TRUTH IS OUT REGARDING MY BOX AND OTHERS LIKE IT

The Auckland High Court has ruled that internet-streaming service My Box cannot be represented as legal, and that using My Box (and other units like it) to show SKY movies, TV and sports programmes breaches copyright.

Sophie Moloney, SKY's General Counsel, welcomed the ruling today. 'This decision, along with the recent ruling against Fibre TV boxes in Christchurch, sends a very clear message to New Zealanders that these services are not all they are cracked up to be.'

'Essentially these boxes have been marketed and sold as legal options for accessing sports and entertainment for a one-off fee, when all they do is find and broadcast pirate streams', said Sophie.

'We were concerned that New Zealanders were being duped into buying these My Box units on the false promise that they could use them to watch SKY's content legally. The Court has made it clear that this is not the case'.

'We know that some My Box customers were already unhappy with My Box and its claims before we took this action, with Facebook and Geekzone forums set up by irate customers. However, according to public statements made by My Box's Krish Reddy, many more thousands of people were still buying the boxes.

'We took action against My Box and Mr Reddy under the Fair Trading Act, as we knew they were making claims to New Zealanders that were misleading and incorrect.

Recent research into piracy in New Zealand found that many people find it difficult to know whether TV shows and sports they were watching online were legitimate, especially when they had paid a significant sum for a pre-loaded Kodi box at the outset.

The research also found that around 5% of New Zealanders are regularly using pre-loaded Kodi boxes (like My Box) to stream pirated content.

'The Court's decision sends a strong message that any marketing claims that the content on these boxes can be watched legally are untrue. Fair-minded New Zealanders can now know the truth about these types of services and instead look to all of the legal services available online in New Zealand from the free apps of TVNZ On Demand and ThreeNow through to the subscription services of Netflix, NEON, LightBox and FAN PASS.

Next steps

'This ruling was the first part of the process, and we now await the full trial next year to determine damages. It was very difficult for us to calculate possible damages as we only had public statements by My Box promoter Krish Reddy to go off. The next stage of the legal process involves 'discovery', where the parties will exchange information (like sales of My Box units in New Zealand) that will assist the Court to decide on damages payable to SKY.'

The next mention is scheduled for February 2019.

BACKGROUND

Key points in the ruling

SKY sought a ruling from the Court under the Fair Trading Act on whether marketing statements made by My Box and its owner, Mr Krish Reddy, about the legality of the My Box unit were misleading and deceptive.

The Associate Judge found that:
• It is not lawful to use My Box units (or other pre-loaded Kodi boxes) to receive, access and view SKY's exclusive content, without paying the appropriate fees to SKY.
• My Box and Mr Reddy have 'communicated' protected copyright works to the public without licences from copyright owners and have therefore committed copyright infringement, actionable by the relevant copyright owners or exclusive licensees.
• SKY is entitled to an injunction restraining the defendants from making any further representations that using My Box or an equivalent to access or view SKY's exclusive content in NZ is lawful.
• SKY has leave to make an application for an inquiry into damages.

SKY had also sought an injunction against the actual promotion, offering and supply of the My Box units. The Court declined to grant this interim relief having found that it is at least arguable that relief of that type should be sought under the Copyright Act. This may be more fully considered at the trial stage.

Why Fair Trading Act and not Copyright Act?

SKY chose to take action under the Fair Trading Act (FTA) because our most immediate concern was that My Box and Mr Reddy were misleading the public about the legality of the My Box units. Proceeding under the FTA was the quickest and most efficient way to correct those misrepresentations.

In order to take action under the current Copyright Act, we (and other affected copyright holders) would first have to 'establish copyright' in each individual piece of content infringed by My Box. Doing so would have added layers of complication, cost and delay.

The Associate Judge upheld SKY's approach by finding that the sale of My Box units, and using them to view copyright content, amounted to a breach of the Copyright Act, regardless of who owned the copyright. Accordingly, he made orders that include a final injunction preventing My Box and Mr Reddy from continuing to market the units as legal. This fulfilled SKY's primary objective in bringing the legal action.

Until a full trial of the matter, Associate Judge Smith reserved judgment on whether the FTA enabled him to also make orders restraining the sale of the units, or whether it would be necessary for the relevant copyright owners and exclusive licensees to seek that relief under the Copyright Act instead.

Does the Copyright Act need to be amended?

We believe it does.

It is clear from the judgment that a claim under the Copyright Act could succeed, but it would have been a complex and time-consuming process. Because the copyright content available through My Box spanned the full spectrum from movies to sport to news, the procedural steps required to make a claim were not practical (since the current Copyright Act requires the affected copyright owners and exclusive licensees to join the proceedings).

This highlights the need for a change to the Act to bring it in line with overseas jurisdictions. For example, the UK Copyright, Designs and Patents Act contains a provision that makes it an offence to knowingly infringe copyright works by communicating them to the public, which addresses exactly the sort of conduct at issue in the My Box case. Action under this section is taken by the Police rather than individual copyright owners (although a private prosecution could also be possible).

A provision like this in New Zealand law would be helpful in cases (like My Box) where the infringing conduct affects a wide group of rights-holders and consumers.

The Government is undertaking a review of the Copyright Act and we encourage them to include this matter in the scope of the review.