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SA Sell In-House Broadcasting System to Other Businesses - Legal?

Discussion in 'Commercial Law Forum' started by DanCraig, 7 July 2015.

  1. DanCraig

    DanCraig Member

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    Hi, I have an audio visual company and we have been asked by a gym to design a system that allows in-house advertising to be played through their TV system over the top of Foxtel / free to air broadcasts.

    The way it would be set up is the gym sells the advertising to local businesses, we design their ad and on a timer the ad is played on the screens coming over the top of whatever is on at the time. It isn't cost effective to do this for 1 or 2 gyms so we would like to know if we can sell this system to other businesses such as pubs, hotels, etc without the fear we are doing anything illegal under Commercial Law?
     
  2. Rod

    Rod Well-Known Member

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    If there is nothing in writing saying the gym owns the IP, then you are on solid ground.

    Best however is to say somewhere in your terms of supply that you own all IP and they have a license for its use.
     
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  3. DanCraig

    DanCraig Member

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    Thanks Rod, the gym isn't the issue. I'm more concerned that Foxtel or a free to air station could cause us problems because we are selling an advertising system designed to go over their broadcasts.
    Do you think this may that be an issue?
     
  4. Rod

    Rod Well-Known Member

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    Hmm not 100% sure.

    I assume that your method doesn't care if the screen image is free to air or Foxtel and would work even if the Foxtel/free to air signal stopped. If this is the case then whatever the Gym owner does with it (ie show foxtel/free to air etc) as background is not your concern.

    Maybe someone with a little more legal knowledge can help here.
     
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  5. DanCraig

    DanCraig Member

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    I agree from the point of view that the background isn't relevant. The issue I see is that to sell the system we'd have to explain its most practical uses which involve Foxtel and free to air. If we cant mention them I don't think it will be successful, it would rely too heavily on the customer putting 2 and 2 together.
     
  6. Tim W

    Tim W Lawyer

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    Building the hardware, no great problem.

    If it's used the way you describe however, then yes, potential problem - for the user.
    If you sell the device sold as "use this device to overlay onto Foxtel's content", then yes, potential problem - for you.

    I would want to be sure that the gym (or whoever inthe future) is not infringing on Foxtel's copyright
    by inserting other content into the feed.

    Thing is, if/when Foxtel cuts off their service (or even sues them...) for breach of copyright,
    (or for possibly breaching some other T&C about the integrity of the feed),
    it's you they will probably complain to, possibly alleging that "you should have told them".
    And if you sold the device for exactly that purpose, then you may have a problem.
     
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  7. DanCraig

    DanCraig Member

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    Thanks Tim,
    That is exactly where we stand and the question im looking for an answer to.
    So we have an advertising system that runs over anything currently displayed on a screen. ie DVD, Foxtel, CCTV, free to air etc.
    By approaching businesses to sell them this system fully installed would we be breaking any laws?
     
  8. Tim W

    Tim W Lawyer

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    Not necessarily.

    Going only by what you have told us here (missing facts missing, and unstated ifs, buts, and variables not allowed for),
    your device itself does not (so far as we can tell) seem any more unlawful than
    a common VCR, or a old fashioned radio-cassette device, or an STB that records - all of which are capable
    of making infringing copies of things... but are principally intended for lawful use.

    Your device could equally be used to insert content into (other) material
    in which the gym holds either copyright, or a bona fide licence ("into their own content").
    For example, inserting advertising into their own in-house instructional videos? Not likely to be a problem.

    Advertising and product literature (manuals etc) often contain cautions
    against using devices to infringe copyright.... but it isn't the manufacturer or the seller
    who infringes, it's the user.

    That said, given that you now (more than) suspect that your device might be used to act unlawfully
    (ie infringe copyright), and that it isn't commercially viable to build just one,
    it may now be open to you to decide not to manufacture the device at all.
     
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