On Friday 29 July 2016, the Federal Court handed down its decision in the Australian Olympic Committee’s (‘AOC’) case against Telstra in light of Telstra’s unauthorised and misleading Olympic themed “Go to Rio” advertisements.
AOC relied on section 36 of the Olympic Insignia Protection Act 1987 (‘OIPA’), alleging that Telstra had infringed this section which states that a person, other than AOC, must not use a protected Olympic expression for commercial purposes unless such use is in accordance with a valid licence. The AOC also claimed Telstra contravened either or both sections 18 or 29(g) and (h) of the Australian Consumer Law, which relate to misleading and deceptive conduct and false representations regarding sponsorship.
Telstra used to be a sponsor of the Olympics from 1990 to 2012, but has since been replaced by Optus so does not have a valid licence to use an Olympic expression for commercial purposes.
Telstra is, however, the official technology partner of Seven Network, who is the official Australian broadcaster for the Olympics.
Telstra’s advertisements featured the Peter Allen song “I Go To Rio” and images of people watching what appears to be Olympic events on a mobile phone or tablet and originally included the tagline “Official technology partner of Seven’s Olympic Games coverage”. However after receiving legal threats from the AOC to make “clear that Telstra is not an official sponsor of the Olympic Games, the Australian Olympic team or of the Australian or International Olympic Committees”, Telstra modified its advertisement to include a disclaimer specifically disassociating itself from the Olympic Games.
Nevertheless the AOC took legal action against Telstra, which on 29 July 2016 was dismissed by the presiding judge, Justice Wigney, who ordered AOC pay Telstra’s court costs.
Telstra successfully argued that it is Seven’s right to broadcast the Olympics on its devices and services and none of Telstra’s marketing uses “Olympics” as a stand-alone phrase, but instead referred to it as “Seven’s Olympic Games Coverage” or “Seven’s Olympics”, so it was only representing the truth, being Telstra is sponsoring Seven’s coverage of the Olympics via its “Olympics on Seven” app.
While Justice Wigney agreed Telstra had perhaps “pushed the envelope as far as it could” with respect to the original advertisement, he held that subsequent revisions were sufficient and in any event did not agree that Telstra’s conduct was enough to contravene either of those sections of the Australian Consumer Law or section 36 of the OIPA as claimed by AOC.
The judge held “the central question in resolving this dispute is this: do the Telstra promotions and advertisements suggest to a reasonable person that Telstra is a sponsor of, or provided sponsor-like support to, bodies and teams associated with the Rio Olympic Games? Or do they simply suggest that Telstra sponsors Seven’s broadcast of the Rio Olympic Games and promote the ability of Telstra customers to access the premium version of Seven’s “Olympics on 7” app?”.
Justice Wigney concluded with the latter and held that the advertisement would not suggest to a reasonable person that Telstra had sponsorship of the Olympics, but rather that Telstra was merely promoting its relationship with Seven, which had the rights to broadcast the Olympic Games.
This case is a huge win for Telstra and will certainly give other service providers who are not official sponsors of the Olympics a lot more confidence to go closer to the “borderline” of what might otherwise be seen as misleading ambush marketing.