Last year, we reported on a decision of the Federal Court of Australia, in which the Australian Olympic Committee (AOC) unsuccessfully sought injunctive relief to prevent Telstra from running its “Go to Rio” advertising campaign in the lead-up to the 2016 Summer Olympic Games in Rio.[1]

In an attempt to preserve the value of its lucrative sponsorship contracts, earlier this year the AOC got back in the ring and appealed against the Federal Court’s finding. Last week, the Full Court of the Federal Court unanimously upheld the Federal Court’s decision, delivering a knock-out punch to the AOC and, by extension, organisers of other major sporting events who similarly rely on high-value commercial sponsorships.

This decision calls into question the sufficiency of statutory provisions in successfully preventing ambush marketing by competitors, which can dilute the value of supposedly exclusive sponsorship contracts.

The background: Australian Olympic Committee, Inc. v. Telstra Corporation Limited

In 2016, Telstra’s rival Optus paid a multi-million dollar sum to be the official telco sponsor of the Rio Games. However, this didn’t stop Telstra from engaging in a clever (or, as the AOC argued, deceptive) ambush marketing campaign to get itself a slice of the Rio action. Telstra ran an advertising campaign in the lead-up to the Games featuring footage of sports enthusiasts set to the sounds of Peter Allen’s “I Go To Rio” and the phrase “Get free premium access to the ‘Olympics on 7’ App”, much to the AOC’s (and no doubt Optus’) displeasure.

While Olympians around the world were preparing to compete for gold at Rio, the AOC and Telstra were battling it out at an urgent hearing for injunctive relief to prevent the advertisements from airing. The AOC argued that consumers could be misled into believing that Telstra was an official sponsor or otherwise associated with the Australian Olympic team.[2]

However, Justice Wigney ultimately found that while Telstra “may well have succeeded in fostering some sort of connection or association between the Rio Olympic Games and the Telstra ‘brand’”,[3] it did not contravene any laws. He noted that the campaign merely suggested Telstra was the official sponsor of the television broadcast of the Games on Channel Seven, and promoted the ability of its customers to access the premium version of the Channel Seven app. The AOC’s injunction was denied and the advertisements went ahead.

The AOC goes down swinging: the appeal in the Full Federal Court

Despite both the Rio Games and Telstra’s allegedly misleading campaign now being a distant memory for most viewers, the AOC wasn’t ready to throw in the towel, appealing against the Federal Court’s decision on a number of grounds.

If the Federal Court’s decision was overturned, as the AOC was hoping, this would deter companies seeking to engage in similar ambush marketing around future Games, and would reaffirm the value of the AOC’s exclusive corporate sponsorships.

Instead, it was Telstra that came away victorious, with a unanimous decision of the Full Court to uphold the original decision.[4] The Full Court noted that Justice Wigney’s findings of fact were open to him on the evidence, and found no error in his conclusion that Telstra’s advertisements were not misleading or deceptive.

In a statement published after the decision was handed down, Matt Carroll, CEO of the AOC, expressed his disappointment in the decision, but took great pains to point out that “the judgment does not mean that businesses generally can engage in Olympic themed advertising” as it dealt only with the specific factual context of Telstra’s agreement with Channel Seven as the exclusive broadcaster of the Games.

What this means for sponsors and advertisers

The implications of this decision should be borne in mind by sponsors of the upcoming 2018 Commonwealth Games and other major sporting events, as well as companies considering engaging in any marketing campaigns around them.

It demonstrates the limits of statutory prohibitions when ambush marketing campaigns have been cleverly designed to stay within the boundaries of the law, but where the evidence suggests are nonetheless intended to capitalise on the goodwill generated by the event, without having to pay for an official sponsorship.[5] The decision does not mean it is now open season for ambush marketing: the use of specific terminology and logos remain tightly circumscribed by legislation.[6] However, it does show that the court is not willing to find that consumers will be deceived lightly, even if the evidence indicates that the defendant did intend for their campaign to allude to the relevant event and thus foster some connection between themselves and the event in the public’s mind.

The disappointing outcome for the AOC also underscores the importance of including provisions in any sponsorship contracts which are specifically aimed at brand protection and strategies to combat ambushing marketing. This will ensure that the exclusivity of such contracts is not diluted by ambush marketing campaigns. For ideas on such strategies to avoid being blind-sided by a competitor’s ambush marketing, see our earlier article here or contact a member of the IP team.

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

[2] In contravention of the Competition and Consumer Act 2010 (Cth) sch 2, ss 18, 29(1)(g), 29(1)(h), 29(1)(l) and the Olympic Insignia Act 1987 (Cth) ss 23, 28, 30(2), 36, 38.

[3] Australian Olympic Committee, Inc. v. Telstra Corporation Limited [2016] FCA 857 at [149] per Wigney J.

[4] Australian Olympic Committee, Inc v Telstra Corporation Limited [2017] FCAFC 165.

[5] Australian Olympic Committee, Inc. v. Telstra Corporation Limited [2016] FCA 857 at [149] per Wigney J.

[6] Olympic Insignia Act 1987 (Cth); Major Sporting Events (Indicia & Images) Protection Act 2014 (Cth).