Update: Australian Olympic Committee, Inc. v Telstra Corporation Limited [2016] FCA 857

The Olympic Games is the largest sporting event in the world. Viewed by billions of people worldwide, many companies understandably seek to associate themselves with the excitement and inspiration of this international event.

While some companies enter arrangements with the International Olympic Committee (IOC) or Australian Olympic Committee (AOC) to become official partners or sponsors of the Olympics or Australian Olympic team, others may seek to connote an association with the Olympics without the authorisation of Olympic organisations. The ability of unauthorised persons to claim a direct or indirect association with the Olympics has previously been the subject of legal proceedings by rights holders and other interested persons.¹

In Australia, the AOC is exclusively empowered under the Olympic Insignia Protection Act 1987 (Cth) (OIPA) to use for commercial purposes in Australia, and to grant licences to use, ‘protected olympic expressions’ as that term is defined in the OIPA.² The AOC can take action to stop others from trying to associate themselves with the Olympics and the Australian Olympic team.

In July 2016 the AOC brought proceedings in the Federal Court against Telstra Corporation Limited (Telstra) in relation to a series of advertisements by Telstra in the lead up to the 2016 Rio Olympics.

Telstra’s advertisements

Telstra is the technology partner of Seven Network (Operations) Ltd (Seven) for Seven’s 2016 Rio Olympics coverage. Telstra also marketed Seven’s ‘Olympics on 7’ app (App), which Telstra customers can access for free.

From 1992 to 2012 Telstra was the exclusive telecommunications ‘Team Sponsor’ of the Australian Olympic team under The Olympic Partner (TOP) programme, which gave Telstra the right to use certain protected olympic expressions, under licences granted by the AOC. Since 2015 another telecommunications company, Optus, has been the exclusive telecommunications ‘Team Sponsor’ of the Australian Olympic team, giving it exclusive use of these protected olympic expressions in the telecommunications category.

From early July 2016 Telstra produced a series of advertisements, including an email to its customer base, website content and television advertisements (Telstra Advertisements). The Telstra Advertisements included the following:

• promotion of the App and an offer of free access to the App for all Telstra customers
• statements that included the expression ‘Rio 2016 Olympic Games’
• statements referring to Telstra as ‘Seven’s official technology partner’ and the ‘Official Technology Partner of Seven’s Olympic Games coverage’ and encouraging customers to ‘Go to Rio with the ‘Olympics on 7’ App’
• video depicting participants playing and watching Olympic sports on their mobile devices, accompanied by an audio recording of Peter Allen singing ‘I Go To Rio’.

The Telstra Advertisements promoted the App and stated that Telstra was the ‘Official Technology Partner of Seven’s Olympic Games Coverage’. The Telstra Advertisements also included use of the words ‘Olympics’ and ‘Olympic Games’.

The Australian Olympic Committee complained that the Telstra Advertisements used protected olympic expressions without a licence from the AOC and that the Telstra Advertisements would lead viewers to believe that Telstra had an affiliation or sponsorship arrangement with the AOC, the International Olympic Committee, the Olympic Games or the Australian Olympics team (collectively, Olympic Bodies). In response to the AOC’s initial complaint, Telstra included a disclaimer in the Telstra Advertisements, to the effect that it was not an official sponsor of any of the Olympic Bodies. This disclaimer did not satisfy the AOC and the AOC demanded Telstra provide certain undertakings. The requested undertakings were not provided and the AOC consequently filed proceedings against Telstra in the Federal Court on 15 July 2016.

Issues in the legal proceedings

The key issues before Justice Wigney of the Federal Court were:

• whether Telstra had used a ‘protected olympic expression’ for commercial purposes in contravention of Section 36 of the Olympic Insignia Protection Act 1987 (Cth) (OIPA)
• whether Telstra had engaged in misleading or deceptive conduct under section 18 of the Australian Consumer Law (ACL)
• whether Telstra had made false or misleading representations under section 29 of the ACL.

Olympic Insignia Protection Act 1987 (Cth)

The AOC claimed that the Telstra Advertisements breached Section 36 of the OIPA, which provides that a person must not use a protected olympic expression, such as ‘Olympics’ or ‘Olympic Games’, for commercial purposes, where they are not licenced by the AOC to do so.

Under section 30 of the OIPA, a protected olympic expression will be used ‘for commercial purposes’ when the expression has been applied to goods or services for advertising or promotional purposes. This application must suggest to a reasonable person that the provider of the goods or services is a sponsor of, or a provider of ‘sponsorship-like support’³, to any or all of the Olympic Bodies.

The AOC alleged that the use of the protected olympic expressions in the Telstra Advertisements was an application of the relevant expressions to their goods or services for a commercial purpose, as they would suggest to a reasonable person that Telstra is a sponsor, or provider of sponsorship-like support, for one or more of the Olympic Bodies or part thereof.

Australian Consumer Law

The AOC also alleged that by publishing, causing to be published, or otherwise distributing the Telstra Advertisements, Telstra breached provisions of the ACL.

Misleading and deceptive conduct

Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

The AOC claimed that the Telstra Advertisements conveyed a representation that Telstra has some form of affiliation or sponsorship arrangement with one or more of the Olympic Bodies. The AOC also claimed that the Telstra Advertisements lead viewers to erroneously assume that Telstra had some form of affiliation or sponsorship arrangement with one or more of the Olympic Bodies, or that their goods or services had some form of endorsement or approval from any of the Olympic Bodies.

False or misleading representations

Sections 29(1)(g) and 29(1)(h) of the ACL provide that a person must not, in trade or commerce, and in connection with the supply or possible supply of goods or services, make false or misleading statements that the person or their goods or services have sponsorship or approval from another party.

The AOC claimed that the Telstra Advertisements falsely claimed that their goods or services had a sponsorship arrangement with one or more of the Olympic Bodies or that that any of the Olympic Bodies had approved these goods or services.

Decision

On 29 July 2016 Justice Wigney of the Federal Court held that Telstra had not breached Section 36 of the OIPA or sections 18, 29(g) or 29(h) of the ACL.

Olympic Insignia Protection Act 1987 (Cth)

There was no dispute that Telstra applied protected olympic expressions to their telecommunications services as part of the Telstra Advertisements and that this application was undertaken for advertising or promotional purposes, or would likely enhance the demand for these services.

The main issue in contention was whether the Telstra Advertisements would suggest to a reasonable person that Telstra was a sponsor, or provider of sponsorship-like support, for one or more of the Olympic Bodies or part thereof. The Court noted that some of the Telstra Advertisements were ‘borderline’⁴ and conveyed an ambiguous or unclear message. While the Court found there was little doubt that Telstra intended the Telstra Advertisements to convey an association of sorts with the Rio Olympic Games, the association ultimately conveyed was between Telstra and Seven’s Olympic Games broadcast and the App, rather than any Olympic Body.⁵

Australian Consumer Law

The AOC’s case under the ACL was slightly broader that the case under the OIPA, as it was concerned with the overall impression conveyed by the Telstra Advertisements and was not limited to the use of protected olympic expressions. The Court rejected the AOC’s assertion that the Telstra Advertisements individually or collectively, conveyed a false or misleading representation or involved misleading or deceptive conduct under the ACL.

The Court held that the Telstra Advertisements did not convey, or were not likely to convey, to reasonable persons in the class to whom they were directed or likely to be received, that Telstra had some form of sponsorship, licencing or affiliation arrangement with a relevant Olympic Body. Again the Court held that the Telstra Advertisements would only convey to a reasonable person an association between Telstra and Seven, Seven’s Olympics broadcast or the App. This representation was not considered misleading or deceptive.

In particular, the Court considered the following important considerations in reaching its decision:

• the words ‘Olympics’ and ‘Olympic’ were only used as part of a composite expression ‘Olympics on Seven’ or in the context of Seven’s coverage of the Rio Olympic Games
• the Telstra Advertisements did not refer to any Olympic Body or use any Olympic emblem or symbol
• the Telstra Advertisements did not show images of any member of the Australian Olympic team
• the sports people depicted in the Telstra Advertisements were not Olympic athletes
• the Telstra Advertisements were about watching the Rio Olympic Games on a mobile device in circumstances where it was made clear enough that the coverage is Seven’s Olympic coverage.⁶

Other matters

IOC approval

Under their agreement with Seven, Telstra was required to create a ‘landing page’ on their website in order to authenticate their customers’ details before they could gain access to the App. Seven sought the IOC’s approval of the form of this landing page, which included the script ‘Got to Rio with the ‘Olympics on 7′ App’. No approval was sought in relation to the Telstra Advertisements.

Telstra contended that this approval from the IOC was ‘an authorisation, licencing and/or approval arrangement with the IOC’ which provided a complete answer to the AOC’s claims, including the claim under the OIP Act.

The Court held that Telstra was not a party to any authorisation granted to Seven by the IOC, regarding use of the protected olympic expressions. It also held that if Telstra had been a party to such an authorisation, this would not constitute a licence granted by the AOC for the purposes of the OIPA.

Notwithstanding provisions in the Olympic Charter providing that ownership of all rights in the Olympic Games and Olympic properties reside with the IOC and allowing for exploitation of those properties by the IOC, it is only the AOC which can grant a licence to protected olympic expressions for the purposes of the OIPA.

Olympic theme

The Court noted that the Telstra Advertisements were clearly themed around the Rio Olympic Games. However, Justice Wigney also stated that it is ‘not enough for the AOC to prove that the advertisements were Olympic themed’⁷. The conduct by Telstra, which simply promoted its relationship and arrangements with Seven, could not be regarded as misleading or deceptive, even in circumstances where the Telstra Advertisements related to, or sought to capitalise or exploit, in a marketing sense on the Rio Olympic Games.

While his Honour found in favour of Telstra, he noted that whether advertisements, marketing and promotions expressly refer to any Olympic Body, or use Olympic symbols or emblems is not determinative of whether an association was conveyed. Associations can be conveyed by subtle, emotive or pervasive suggestions.⁸

Evidence was led which showed that Telstra ‘intended to exploit its commercial agreement with Seven as a way of associating itself…with the Olympic Games’⁹. In this respect, the Court noted that intention is not a necessary element in demonstrating a breach of the OIPA or the relevant sections of the ACL. While such an intention may assist the Court in determining whether an impression was in fact conveyed, it is not a conclusive factor. In any event, the Court held that Telstra’s intention was not to actually suggest a sponsorship arrangement with any or all of the relevant Olympic Bodies.

Inclusion of a disclaimer

The disclaimer added by Telstra to the Telstra Advertisements stated that ‘Telstra is not an official sponsor of the Olympic Games, any Olympic Committees or teams’.¹⁰ While disclaimers will not always prevent conduct or representations from being misleading or deceptive, the Court held that in this case the disclaimer acted to make it ‘tolerably clear’¹¹ that Telstra had no sponsorship arrangement with any of the Olympic Bodies.

The AOC claimed that the use of ‘official’ within the disclaimer may suggest to a reasonable person that some unofficial sponsorship arrangement with any of the Olympic Bodies may exist. The Court stated that the disclaimer would have been clearer had it not included the term ‘official’, but it held that the disclaimer was ‘sufficient to erase or reverse any impression that Telstra did sponsor any Olympic body’.¹²

Conclusion

The OIPA creates protections for marks and expressions relating to the Olympic Games and associated organisations and teams. The rationale for this protection is prevention of the unauthorised commercial use of those marks and expressions including unauthorised use by way of ambush marketing. In the recent Federal Court litigation the AOC was unable to use the protections under the OIPA to prevent Telstra’s advertising campaign because the Court found that the use of Olympic related marks and expressions did not constitute an impermissible suggestion that Telstra was a sponsor of, or provided sponsorship-like support for one or more of the Olympic Bodies. Telstra’s commercial association with Seven, an official broadcaster of the Rio Olympic Games, was a critical factor in the Court’s analysis of the Telstra Advertisements.

Further, this case is a useful illustration of the application of sections 18 and 29 of the ACL to promotional material. The judgment reinforces the need to carefully consider the nature of and intended audience for, representations made in advertising and sponsorship material.

¹See for example Seven Network Limited & Ors v News Interactive Pty Ltd & Ors [2004] FCA 1047, New Zealand Olympic and Commonwealth Games Association Inv v Telecom New Zealand Ltd & Anor (1996) 35 IPR 55
²Sections 36 & 38 of the Olympic Insignia Protection Act 1987 (Cth)
³Section 29 of the Olympic Insignia Protection Act 1987 (Cth)
⁴[2016] FCA 857, 142
⁵[2016] FCA 857, 103
⁶[2016] FCA 857, 142
⁷[2016] FCA 857, 138
⁸[2016] FCA 857, 138
⁹[2016] FCA 857, 96
¹⁰[2016] FCA 857, 33
¹¹[2016] FCA 857, 105, 109 & 116
¹²[2016] FCA 857, 143