Australian media is facing a digital assault. Print and broadcast are being dissected and replaced by the internet as policy makers grapple with how to regulate the rapidly converging media environment. So where does this leave the lawyers being paid to protect existing products and new innovations? Stephanie Quine investigates.

The Australian media industry is undergoing unprecedented change. The surging wave of technological advancement hit Australia’s oldest print media organisation earlier this month, with 1900 jobs to be cut and printing presses to be shut down.

As Fairfax is grilled on why it did not move faster to integrate its print and digital offering, media law experts and policy makers are feeling the pressure to regulate an industry facing rapid change.

For lawyers advising on related intellectual property (IP) issues, work is increasingly complicated, according to Hamish Fraser, a partner in Truman Hoyle’s technology and IP practice.

No letter of the law

The Optus TV Now, IceTV vs Nine and the iiNet decisions are all examples of complicated law making it hard to give clients unified advice in a fast-changing environment.

“We recently advised at least two clients around the very same issues that were tied up in the [Optus TV Now] decision and they’re difficult advices to do because so far we’ve got a decision from a single judge and then a full court decision, and they’re different decisions on exactly the same issue,” says Fraser, sounding remarkably calm about the lack of black letter law he has to work with.

Dan Pearce is in the same boat at Holding Redlich. His team acts for TV and radio broadcasters; film and TV producers; distributors, and advertising and communications agencies; as well as those at the creative end of spectrum, including writers and performers.

“The clients we continue to serve have more complicated needs because the models everyone took for granted are being challenged by all players who are trying to preserve or expand their position,” says Pearce.

“There’s a shrinking of the windows that used to be the traditional means of distributing film and TV programs,” says Pearce, explaining that the process whereby a theatrical exhibition period precedes exclusive DVD distribution, pay TV, then free-to-air showings, is increasingly getting shorter and crossing over itself.

This is only going to be more prevalent with advances in internet protocol TV that will be facilitated by the rollout of the National Broadband Network.

“Clients are grappling with different ways of contracting and managing different stakeholders because frequently you’ll have a broadcaster wanting one thing and a distributer wanting a different set of rights that are increasingly inconsistent with what the broadcaster wants,” says Pearce.

To complicate matters further, lawyers can’t be certain whether decisions such as the Full Court’s on Optus TV Now will be subject to appeal.

Despite overturning Justice Steven Rares decision, one of the final comments of the Full Court’s judges was: “We have found the questions raised in the appeals to be of some difficulty and considerable uncertainty,” indicating that the dispute, which has broader ramifications for the cloud-computing industry, is ripe for a High Court consideration.

“This just adds to the complexity of the drafting in trying to contemplate alternative scenarios,” says Pearce.

Often it is a case of outlining a host of alternatives and advising on how matters might play out. Sometimes, however, “you can’t solve everything with legal drafting” and the client will make a commercial call about the uncertainty of the situation, he says.

“There’s a natural hesitation about allocating a lot of resources to something that may get shot down by the way a court makes a decision and, even once it’s gone through the courts, Parliament [may] intervene and legislate accordingly, which is where I think the iiNet situation’s got to get,” says Pearce.

Taming the beast

It’s been an intense year for media policy. Three major reports considered the question of how to regulate in a convergent media environment: the Convergence Review; the Independent Media Inquiry (Finkelstein Review), and the Review of the National Classification Scheme.

Each recognised that mass and citizen media now co-exist in the same online space and the days of regulating chiefly on the basis of platform of delivery are over.

The Convergence Review Final Report recommended regulating content on a platform and device-neutral basis, through a new concept of Content Service Enterprises (CSEs).

Audio/visual content providers would qualify as a CSE if they have an audience/user base of 500,000 per month and $50 million per annum of revenue from Australian-sourced professional content.

The label presents potential benefits, including consistent classification standards, but fails to consider other factors, such as how players like Google, Apple and Telstra could be caught depending on future growth paths (see graphic).

CSEs would be required to carry a certain amount of Australian content but, as media and technology lawyer and policy advisor Samantha Yorke points out, it is not immediately clear what the understanding of that content is.

“Will it also include advertising content? Because ad content is actually a lot more sophisticated now than it was a few years ago ... so there’s a lot of questions around how the recommendations might be implemented,” says Yorke, who was last week hired to the newly-created role of Director of Regulatory Affairs at The Interactive Advertising Bureau Australia.

“I’ve been heartened to hear Senator Conroy’s office say they’ll be carrying out a lot more consultation with industry before they make any more decisions, so we’re just standing by on that to see what the Government’s temperature is.”

Brave new world

Fraser believes the current decision against Optus TV Now is wrong and, while he doesn’t think the three Federal Court judges who disagree with him are fools, has taken the more visionary outlook.

“In 10 years’ time people will look back and wonder why we ever had an argument about the virtualisation of the video recorder,” he says.

Apple TV has already progressed, in a mainstream way, what has been occurring on the internet for some time and, no doubt, increasingly sophisticated products like Xbox will access cloud-based facilities more and more.

While these are obvious developments to Fraser now, three or four years ago they were not obvious, or even conceivable.

“That rate of change makes it complex and I don’t know that there’s anything that we can do … we’re all as individuals, as humans, struggling with what’s the next big thing,” he says.

In a period of six years, Facebook went from non-existent in Australia to being used by millions of Australians every single day.

“As Mark Zuckerberg said in the Facebook movie: ‘If [you guys] were the inventors of Facebook, you’d have invented Facebook’. These are not obvious things except with hindsight and then we’ve got to try and work out how the law applies to them,” says Fraser.

Meeting a need

IP and technology lawyers have seen an uptick in work by way of the complexities facing existing clients, but also due to the emergence of new and cautious clients.

Pearce says often they know all the rules that have traditionally applied – whether it be defamation, contempt of court or racial vilification – but aren’t as up to speed with the application of those rules in the new media space.

New media advice is the standout feature of many IP and technology practices at the moment, but it is not the only area keeping them busy.

Trademarks for names for all sorts of different products and arguments with the trademarks’ office about whether a certain mark is registrable are still part of Fraser’s bread and butter work, he says.

“They give your practice that solid foundation from which you then get your reputation and from which you then do the sort of stuff that hurts your brain,” says Fraser.

He believes having a specialist firm works well in the IP and technology space because sometimes clients get “conflicted-out” in big firms.

“I’ve received briefs from big firms where they just can’t take on a client because they’re too closely aligned with one of [the firm’s] big clients … and the big client always wins.”

But, by the same token, large and global firms can offer networking benefits in a globalised future.

As DLA Piper partner and IP litigator Nicholas Tyacke explains, regulatory approval processes in the US and Australia are quite different and impact patent litigation and IP significantly.

“It’s helpful to have people on the ground,” says Tyacke, who acts for both local and global clients in DLA’s life sciences and IP practice.

“Many of the issues life sciences face are similar around the world, or arise at similar times, and so it’s important we have a global team involved so we can provide the coordinated approach but also have the local expertise to provide the nuances necessary.”

Similarly, if the CSE concept were extended to global media companies, questions would crop up as to Australian jurisdictional authority over those businesses.

There isn’t a lot of precedent to help guide decision making in that area.

Yorke, who worked as the Asia-Pacific legal director for Yahoo! and previously as a corporate lawyer with Microsoft, based in London and Europe, says unless lawyers are familiar with the “few precedents scattered around the world”, it can be a very challenging area to practice in.

Tech republic

Yorke has borrowed many people’s time and patience to help her get her head around new products.

She has also taken it upon herself to learn fundamental coding; how to program a website and develop an application.

“That’s why it’s great working in-house for a technology company, because you get access to that expertise. Whereas when you’re outside, in a law firm for example, it would be a lot harder to get that expertise and to find access to people who can help you build that knowledge base for yourself,” says Yorke.

Fraser’s four years’ experience as corporate counsel for Optus has similarly helped him know how to best advise clients.

“When I first started practising, in-house was almost seen as a place to retire to, but I think these days it’s almost a right of passage. All practitioners should spend some time in-house because, if you don’t, you don’t understand the context in which your advice is given and received,” he says.

There are risks to be managed in the media and technology space and lawyers must do a lot of educated guess work.

Testing new tech toys and using social media to interact with friends and colleagues, and to observe the behaviour of people of influence, is another way they can try to keep up.

“You have to get out there and you have to play,” says Fraser, who has had a Facebook account for five years and a Twitter account for three.

“That’s what gets me out of bed; the challenging nature of the work we do.

“It’s hard to commoditise IP and technology work because I think we’re still only at the beginning of the changes that technology will bring to our lives over the next 50 years.”

Working at the boundary of the law, and in some cases completely outside the boundaries, technology and IP lawyers must be comfortable with change.

This is perhaps the most fascinating year yet to be in the business.