The Federal Court's recent decision in Australian Olympic Committee, Inc. v Telstra Corporation Limited[2016] FCA 857 will be of particular interest to brand owners seeking to leverage major sporting events for which they are not official sponsors.

The Court concluded that Telstra's "Go To Rio" television commercial was "perhaps borderline", but it ultimately dismissed the AOC's claims and concluded that the overall advertising campaign did not contravene the Olympic Insignia Protection Act 1987 (Cth) (OIPA) or the Australian Consumer Law (ACL).

The decision is controversial, particularly given the Judge's remarks that "there could….be no doubt that Telstra intended to, and may well have succeeded in, capitalising or exploiting, in a marketing sense, the forthcoming Rio Olympic Games" and "[Telstra] intended to, and may well have succeeded in, fostering some sort of connection or association between the Rio Olympic Games and the Telstra "brand". " 

While Telstra came out on the right side of the line, the facts are unique and the decision should not be taken as carte blanche for brand owners to associate themselves with the Olympics. In this case, Telstra took care to only reference the Olympics in the context of its sponsorship relationship with Channel Seven. While the song "I Go to Rio" was a feature and a clear reference to the location of the 2016 Games, the campaign did not depict any athletes or other Olympic symbols or insignia, which may have pushed the campaign over the line.

The case is an important reminder of the factors relevant to determining which side of the line ambush marketing will fall. Brand owners, in particular, should be reminded that:

  • only official sponsors of the Olympics can convey a message that they have an affiliation with the Olympics or an Olympic body;
  • even using the word "Olympic" is prohibited if the context in which it is used suggests to a reasonable person that the advertiser is an official sponsor;
  • in circumstances where the advertiser is not itself an official sponsor of the Olympics but has a commercial relationship with a third party who is an official sponsor of the Olympics, care will need to be taken when promoting that relationship. Any references to the Olympics must be promotional of that relationship only and not suggestive of a broader sponsorship of the Olympics;
  • the risks will typically be higher where a major competitor is an official sponsor and the marketing communication features athletes, symbols or Olympic indicia; and
  • in all ambush marketing cases it is the overall impression that matters most. Advertising campaigns that seek to make an association with the Olympics or other major sporting event should always be reviewed as a whole.

Background

Telstra is the "official technology partner" of Seven's coverage of the 2016 Olympic Games. The terms of Seven's agreement with the International Olympic Committee (IOC) provided that Seven was permitted to commercially exploit its broadcast rights by, amongst other things, selling broadcast sponsorships and advertising in connection with the broadcast and exhibition of the Games. However, Seven was not permitted to grant any of its broadcast sponsors the right to use Olympic properties or any expressions implying sponsorship of the Olympic Games.

Under its partnership with Seven, Telstra was entitled to use certain designations, as approved by the IOC, including "Seven's Olympic Games broadcast is supported by Seven's official technology partner, Telstra".

Importantly, Telstra is not a sponsor of the 2016 Olympic Games (unlike in previous years).

The Campaign

Telstra ran a series of advertisements: television commercials, ads regarding a Samsung phone promotion, videos on third party websites, Telstra catalogues, Telstra's authentication landing page, point of sale material, and electronic marketing communications.

Notably, the Telstra TV commercial features the Peter Allen song "I Go to Rio" along with visuals of people watching the Olympics on their phones and tablets. At the end of the commercial is the line "Official Technology Partner of Seven's Olympic Games Coverage" (this line was approved by the IOC) and "Olympics on 7".

Following several complaints from the AOC, Telstra included the following disclaimer on the TVCs: "Telstra is not an official sponsor of the Olympic Games, any Olympic Committees or teams".

The OIPA claim

Under the OIPA it is unlawful for a person, other than the AOC, to use a protected Olympic expression for commercial purposes unless:

  • the person is a licensed user; and
  • the protected Olympic expression is an expression that the person is licensed to use; and
  • that use is in accordance with the terms and conditions of the licence.

"Olympic", "Olympics" and "Olympic Games" are protected Olympic expressions. There was no dispute that Telstra applied Olympic expressions and the Court found that Telstra did not have a licence from the AOC to use the protected Olympic expressions.

The OIPA further provides that a person is said to use a protected Olympic expression for commercial purposes if the expression is:

  • applied to goods or services for advertising or promotional purposes; and
  • the application would suggest to a reasonable person that the user was a sponsor of, or was the provider of sponsorship-like support for the AOC, IOC, the Rio Olympic Games or the Australian Olympic team or any section or member of it.

The relevant question was whether the advertisements would suggest to a reasonable person that Telstra is a sponsor of the Olympics or an Olympic body.

The Judge concluded that while the TV commercial in particular "is perhaps borderline, on balance it does not cross the line and suggest that Telstra was a sponsor of the Olympics or any Olympic body". Further, "it cannot be considered, on the balance of probabilities, that the use of the Olympic expressions would suggest to a reasonable person that Telstra was a sponsor, or was the provider of sponsor-like support to any Olympic body".

The AOC adduced evidence of materials from Telstra's creative agency, arguing that Telstra intended to exploit an association with the Olympics. However the Court held that Telstra simply "wished to push the envelope as far as it could". The AOC also presented survey-like evidence that the Court attributed little weight to given that it was not clear which advertisements the participants viewed and what questions they were asked.

Overall, the Court held that the TV commercial (and the other advertisements) would not suggest to a reasonable person that Telstra was a sponsor of the Olympics and therefore Telstra did not breach the OIPA. Regarding the disclaimers – the Court held that while disclaimers will not always erase an otherwise misleading message, the revised advertisements would also not suggest to a reasonable person that Telstra was a sponsor of the Olympics.

The ACL claim

The AOC contended that Telstra had engaged in misleading or deceptive conduct, and made false or misleading representations that it had sponsorship, approval or affiliation with the Olympics or an Olympic body.

For the same reasons outlined above, the Court dismissed the ACL claim, holding that Telstra's conduct amounted to nothing more than advertising its relationship with Seven, which was not misleading. Moreover, the Court found that the advertisements would not lead a reasonable viewer to assume that Telstra sponsored or had an affiliation with the Olympics or an Olympic body.

Conclusion

The Court's decision is the first Australian case in many years to explicitly address ambush marketing and, unsurprisingly, has already been criticised by the AOC for jeopardising funding sourced from official sponsors. While the decision may provide a greater appetite for risk in this space, brand owners should not take the decision as a licence to associate themselves with major sporting events. The facts are unique and, as the Judge noted, there is a fine line to walk.