Optus has suspended its TV Now service following a Federal Court ruling that it leaves it exposed to legal action from copyright holders.

"We will be suspending the product at this time," a spokeswoman said this afternoon.

The decision comes after three judges of the Federal Court in New South Wales dismissed orders which were protecting Optus, following an appeal from the AFL, NRL and Telstra.

Five orders made by Justice Steven Rares in February were dismissed on appeal after a full bench of the Federal Court found Optus was not protected by an exemption in the Copyright Act, which allows recordings for personal and private use.

Optus could be found in breach of the Copyright Act for each occasion where customers have already watched football matches using its TV Now service. Optus has 21 days to ask the High Court to hear its appeal of the Federal Court’s decision.