Australian Olympic Committee v Telstra: Federal Court draws a 'fine line' on ambush marketing - Advertising, Marketing & Branding

(For more information on the legalities of ambush marketing, read our Thinking article 'The Ring Games', here).

The legality of ambush marketing tactics in Australia and the protection of the value of sponsorship rights in relation to the Olympic Games has recently been brought to a head in the decision of Australian Olympic Committee Inc v Telstra Corporation Limited [2016] FCA 857 (Telstra).

In Telstra, the Australian Olympic Committee (AOC) challenged a marketing campaign devised by Telstra which, in the Federal Court's view, was clearly 'focused or themed around the forthcoming Rio Olympic Games'¹, despite Telstra not having any sponsorship-like agreement or affiliation with the International Olympic Committee (IOC) or the AOC.

The primary focus of the decision concerned whether or not Telstra's conduct breached s 36 of the Olympic Insignia Protection Act 1987 (Cth) (OIP Act). The Court also applied the principles relevant in determining whether Telstra had contravened the OIP Act to a separate claim brought by the AOC alleging that Telstra had, more broadly, engaged in misleading or deceptive conduct pursuant to s 18 of the Australian Consumer Law (ACL).

While Telstra had previously been an official Olympic sponsor, it did not hold any official sponsorship arrangement with the IOC, AOC or any Olympic body for the recently-commenced Rio Games. Telstra did, however, hold an agreement to sponsor Seven's exclusive broadcast of the Olympic Games, and was Seven's 'official technology partner'.

Telstra's marketing team was therefore required to walk a fine line: to promote its relationship with Seven without infringing the OIP Act. The AOC considered that Telstra's advertising campaign fell on the wrong side.

THE PROMOTIONS UNDER SCRUTINY

The questioned conduct by Telstra involved 34 separate types of advertisements, promotional or marketing communications or materials (Telstra promotions). The Telstra promotions included three versions of a television advertisement featuring Peter Allen's song 'I go to Rio' accompanied by visual images of various people watching sports including rowing, soccer and swimming on mobile phones or tablets and then participating in those sports themselves.

Some of the commercials included the words 'Official Technology Partner of Seven's Olympic Games Coverage' being shown with the Telstra logo and an 'Olympics on 7' graphic appearing on the screen. Original versions of the commercials did not make explicit reference to the existence (or otherwise) of any relationship between Telstra and the AOC, but later versions included a disclaimer that read 'Telstra is not an official sponsor of the Olympic Games, any Olympic Committees or teams' (Disclaimer).

DETERMINATION ONE: THE CONTRAVENTION OF THE OLYMPIC INSIGNIA PROTECTION ACT

With respect to the AOC's OIP Act claim, the Court was required to apply s 30 and s 36 of the OIP Act to the Telstra promotions. Sections 30 and 36 required the Court to decide whether or not the Telstra promotions suggested, to a 'reasonable' viewer, that Telstra was a sponsor of, or was a party to a 'sponsorship-like' relationship with the Australian Olympic Committee, the International Olympic Committee, or any other Olympic body. This question required the Court to consider whether the Telstra promotions made it sufficiently clear that, insofar as they alluded to any 'sponsorship-like associations', those associations were with Seven, rather than any Olympic body.

In considering what a 'reasonable person' would make of the Telstra promotions, Justice Wigney first noted that the commercials did not make express reference to the IOC, AOC or the Australian Olympic Team, let alone any sponsorship arrangement between Telstra and these bodies. While this was not itself determinative, text contained at the end of the commercials stating that Telstra was partnered with Seven tended to suggest that Telstra's relationship was with Seven, not an Olympic Body. Justice Wigney found that this clarified some of the ambiguity created by references made in the commercials to consumers watching Rio events on their mobile devices with the 'Olympics on 7 App and Telstra'.²

Justice Wigney also drew reference to the Disclaimer that featured in the later versions of the television commercials. His Honour reinforced the principle that, as in a misleading or deceptive conduct claim, a disclaimer will not erase or reverse the impact of what is otherwise represented in a commercial. Instead, such commercials containing potentially misleading representations must be viewed as a whole (including the disclaimers) when considering whether those representations are conveyed.³

While acknowledging that some of Telstra's conduct was 'borderline'⁴ (particularly in relation to the original commercial, which did not contain the written disclaimer), Justice Wigney found that the commercials which did contain the disclaimer made sufficiently clear that there was no sponsorship or sponsorship-like arrangement between Telstra and the AOC.

In making its case, the AOC relied on an internal Telstra marketing brief, which it asserted 'plainly reveal[ed] that Telstra intended to exploit its commercial agreement with Seven' as a way of associating itself, for marketing purposes, with the Olympic Games.'⁵ On this, Justice Wigney held that, while proof of an intention to convey the existence of a sponsorship-like arrangement could be relevant in determining whether the use of an Olympic expression would create such an impression in a reasonable person, this is not a necessary element in proving contravention of s 36 of the OIP Act. In any event, Justice Wigney was not convinced that the marketing brief sufficiently proved that Telstra did intend to create the impression of a sponsorship-like arrangement with the AOC.

The Court made similar observations with regard to evidence tendered by the AOC revealing survey results from interviewees who had viewed the commercials. On this issue, the Court held that evidence of people who actually thought there was a sponsorship-like agreement, and evidence of an intention to create such an impression, was, at best, of peripheral relevance to the 'reasonable person' test that is central to proving an infringement of the OIP Act.⁶

While the Court held that there could be little doubt that Telstra's marketers intended that the campaign would convey some sort of association between Telstra and the Rio Olympic Games, what the Telstra promotions did in fact convey was an association between Telstra and Seven's Olympic Games broadcast and app. The promotions did not suggest to a reasonable person that Telstra also sponsored an Olympic body.⁷

DETERMINATION TWO: THE MISLEADING OR DECEPTIVE CONDUCT CLAIM

Having dismissed the AOC's OIP Act claim, the Court then considered the misleading or deceptive conduct claim. Justice Wigney observed that the AOC's claim for misleading or deceptive conduct was slightly broader. This was because the assessment of such a claim requires a determination as to what the overall impression conveyed by the Telstra promotions (to the 'reasonable viewer') was.⁸ Despite this broader test, Justice Wigney held that the AOC still failed to demonstrate that the Telstra promotions represented that Telstra had any kind of relationship with the AOC, any Olympic body, or any Olympic team. As a consequence, the commercials were not misleading or deceptive.

Justice Wigney again acknowledged that it was clear that Telstra had intended to capitalise on the Rio Olympic Games, and may well have fostered in viewers that it had some kind of association with the Games. However, it was not enough for the AOC to 'prove that the advertisements were Olympic-themed. Were that so, any advertisement over the next month that used Peter Allen's I Go To Rio ... or images of people playing or watching sport, might equally be accused of misleadingly associating themselves with the Olympics Games or Olympic bodies'.⁹

KEY TAKEAWAYS FROM THE CASE

This case demonstrates that, while the OIP Act and the ACL do provide certain protections to the organisers of sporting events and their sponsors against brands engaging in ambush marketing, those protections are not infallible or absolute. If a brand wants to take advantage of the hype and attention surrounding any large sporting event, it will need to turn its mind to the risk of infringing the ACL (and, in the case of the Olympics, the OIP Act).

The use of disclaimers, and the precise identification of the extent of any relationship (or, potentially, the lack thereof) that those brands might have with a sporting event, or pre-existing sponsor of that body, will be vital in, reciprocally, protecting an advertising campaign from crossing the 'fine line'¹⁰ identified in Telstra.

More specifically, those looking to jump on the Olympic bandwagon should take heed of the Telstra decision, which provides a clear indication that the AOC is active in taking steps to protect its rights. While Telstra sailed sufficiently close to the wind on this occasion, other businesses may not be so fortunate.

Footnotes

¹ [3].

² [92] - [94].

³ [106].

⁴ [92].

⁵ [96].

⁶ [102], [103].

⁷ [103], [124].

⁸ [136].

⁹ [138].

¹⁰ [26].

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