Intellectual Property Bulletin – special sports edition – July 2008

In this special issue: The Beijing Olympics 2008 is fast approaching and the world will soon be focused on this great sporting event. Our Sports Law Practice examines some of the legal issues that can arise in the sporting arena, and provides both companies and athletes with some tips on how to maximise involvement in the sports sector.

• Protecting your sponsorship dollar: minimising the impact of ambush marketing
• The Court of Arbitration for Sport
• Sport and new media
• Trade mark developments in China
• Protecting an athlete's identity and image through trade mark registration
• Sponsorship: an athlete's perspective
• Allens top in recent IP client survey
• Allens Sports Practice
• ANZSLA conference

Protecting your sponsorship dollar: minimising the impact of ambush marketing

In brief: There is no 'quick fix' that will prevent ambush marketing, but there is a range of ways to lessen its impact for rights holders and sponsors.

By David Yates, Partner

Sponsorship is the provision of resources (such as money, people, equipment, services) by a party directly to an event, activity, team or athlete in exchange for a direct association with that event, activity, team or athlete. The providing party can then use this direct association to achieve either their corporate, marketing, or media objectives. Ambush marketing, broadly defined, is a deliberate act by a party to associate itself indirectly with an event, activity, team or athlete in order to gain at least some of the benefits that are associated with being an official sponsor¹. For a party to engage in ambush marketing, it does not need to be a competitor of an official sponsor, nor have devised a campaign or contributed significant funds to the ambush. The ambush marketing also does not need to take place on a grand scale. Favourite ambush marketing tactics including sponsoring a broadcast of an event and engaging in major non-sponsorship promotions to coincide with the event, such as utilising mainstream media advertising and/or 'below the line' promotions.

However, legislative remedies are not available in all cases. Section 52(1) of the Trade Practices Act 1974 (Cth) proscribes conduct that is misleading or deceptive or is likely to mislead or deceive. In this area, the section overlaps with the tort of passing off. The difficulty that a sponsor or rights holder has in asserting that an ambush marketer has engaged in misleading or deceptive conduct in breach of section 52 is that in some cases the ambush marketer will not, by its advertising or promotion, be making a (mis)representation that it is an official sponsor of the event or team or athlete or is otherwise officially associated with it. Without such a representation, a claim for breach of s52 is unlikely to succeed. The rights of the Australian Olympic Committee and sponsors of Olympic events have 'additional' protection under the Olympic Insignia Protection Act 1987. Registered trade marks (and, potentially, copyright in text and artwork) are an important part of an anti-ambush marketing strategy, but intelligent ambush marketers who understand this area of law can easily avoid use of the trade marks that are deceptively similar, and otherwise use event names in a descriptive sense.

Certain states have sought to improve the position of the rights holder in connection with events held in their jurisdiction. The main purpose of the Victorian Major Events Aerial Advertising Act 2007 is to provide for the regulation, management and control of aerial advertising at major events in Victoria. The Queensland Major Sports Facilities Act 2001 has had its anti-ambush marketing provisions significantly bolstered through amendments in December 2006. If a major sports facility event is designated a 'declared event', it is an offence for a person to display an advertisement in air space or on a building or other structure that is within sight of a major sports facility during the declared period for the facility if the display is not authorised. The Victorian Australian Grands Prix Act 1994 and Australian Grands Prix (Formula One) Regulations 2006 prevents ambush marketing in connection with the Australian Grand Prix in Melbourne, at least within the area of the race track, by granting the Australia Grand Prix Corporation control of the area of the race track for the race period each year, and prohibiting unauthorised advertisements, including posters, samples or banners from being displayed or used within that area.

Overseas, the Major Events Management Act 2007 of New Zealand, which will become very important with the hosting of the Rugby World Cup of 2011, provides wide ranging protection against 'ambush marketing by association' and 'ambush marketing by intrusion'. Amendments to the South African Merchandise Marks Act 1974 in 2003, and Olympics-related legislation in countries such as the United Kingdom, Canada and the People's Republic of China also have been designed to lessen the impact of ambush marketing.

There is probably no 'quick fix' that will prevent ambush marketing, but there are a range of ways to lessen its impact for rights holders and sponsors, such as developing a range of titles and logos that only official sponsors may use and that allow official sponsors to distinguish themselves from other parties (and registering these as trade marks); 'tombstone advertising' thanking official sponsors for their support; contractual restrictions on offering sponsorship in connection with broadcasts; aggressive marketing of sponsorships; careful management of the layers of sponsorship between athletes, teams, venues, competitions and events; controlling a precinct, including a restriction on items that patrons can bring into a precinct (such as promotional items for non-sponsors); ticket conditions; informal 'clean corridors' along key transport routes to and from a venue; and having your legal team ready to tackle any ambush marketing that occurs in the lead-up to, and during, an event. A careful strategy developed ahead of negotiations with broadcasters and sponsors, plus positive steps in conjunction with sponsors in the lead-up to the event, and a smooth legal operation as a last resort, as discussed above, should be the best way to minimise the impact of ambush marketing.

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The Court of Arbitration for Sport

In brief: In an Olympic year, the services of the Court of Arbitration for Sport are in peak demand. This Olympic year has been no exception.

By Jim Dwyer, Partner, and Rosie Hooper, Lawyer

Background

The Court of Arbitration for Sport (CAS) was formed in 1984 at the suggestion of the International Olympic Committee (the IOC) to deal with the growing number of international sports-related disputes. The IOC recognised the need for a centralised sports-specific arbitral jurisdiction to resolve such disputes in a flexible, expedient and inexpensive manner.

In 1993, the Swiss Federal Tribunal, Switzerland's Supreme Court, recognised the finality of CAS awards. In 2000, the New South Wales Court of Appeal in Australia recognised the independent jurisdiction of CAS and that its determinations are unable to be challenged further through the courts.²

CAS has nearly 300 arbitrators from 87 countries, selected for their specialist knowledge of arbitration and sports law, and approximately 200 cases are determined each year.³ Registrations are inevitably higher in an Olympic year.⁴ CAS is under the administrative and financial authority of the International Council of Arbitration for Sport and is independent of any sports organisation. Its head office is in Lausanne, Switzerland.

The CAS Oceania Registry was established in Sydney in 1996. Since that year, there have been more than 150 CAS Oceania awards, including non-selection disputes, doping and disciplinary matters. The CAS Oceania Arbitrators are present and former judges of the Federal Court and State Supreme Courts and Queen's Counsel and practising lawyers. They are located throughout Australia, in New Zealand and in countries in the Oceania region. Many of the appeals that come to CAS in Sydney are 'urgent' and the hearings take place within days of the filing of the appeal papers.

Jurisdiction

CAS jurisdiction arises from a number of interlocking agreements between athletes and their national sporting federations. The athlete, the federation and other relevant sporting bodies agree to submit all disputes to CAS and that its decision is final and binding on the parties. Further, they surrender their rights to commence proceedings in, or to appeal to, a court or other judicial authority in relation to a CAS dispute.

CAS procedures are governed by rules contained in the Code of Sports-related Arbitration (the Code). The Code divides CAS arbitration services into Ordinary and Appeals Divisions. Disputes relating to doping matters and selection issues are dealt with by the Ordinary Division. The Appeals Division handles disputes arising from decisions of sports federations, associations or sports-related bodies, as well as appeals from CAS first instance decisions. In addition to arbitration procedures, the Code establishes an advisory procedure whereby organisations can request an opinion from CAS on a contentious sports-related legal issue.

CAS arbitration offers a more flexible process than a court, allowing the parties to be involved in selecting the arbitrator. Parties may appear with or without representation, legal or otherwise. CAS hearings are confidential and are not open to the media or the public, and the arbitrator's awards (besides those under the Appeals Division) are not published unless the parties agree.

Beijing Olympics 2008

An 'ad hoc' Division of CAS comprising a panel of experienced CAS arbitrators from many countries (including Australia) will be present before, during and after the Beijing Olympic Games starting in August this year. This follows the practice at previous Summer Olympic Games in Athens, Sydney and Atlanta. Any doping, disciplinary or other issues that arise will be referred to a member or members of the ad hoc panel so that the issue can be dealt with expeditiously in the Olympic village.

CAS Oceania Registry

Allens provides the CAS Registry in Sydney and Litigation Partner Jim Dwyer is the Honorary Permanent Secretary of the CAS Oceania Registry. The firm provides all the administrative functions in operating the CAS Oceania Registry, making available its offices for hearings and its litigation lawyers to handle administrative aspects of the arbitration process.

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Sport and new media

In brief: The increasing prevalence of sports coverage on the Internet and mobile phones presents both opportunities and challenges for sporting bodies and media organisations. This article looks at two issues in the area of sport and new media and how these are being addressed in the context of the Beijing 2008 Olympic Games.

By Miriam Stiel, Partner

New media rights

Broadcasting arrangements for sporting events have traditionally focused on television and radio. The sports rights landscape has changed in recent years, with the scope of broadcasting arrangements now including rights for live coverage, as well as highlights packages, over the Internet and on mobile phones. Exploitation of new media rights now represents a significant stream of revenue for sporting bodies who, together with the rights-holders, are naturally concerned to protect the value of the arrangements by preventing any unauthorised dissemination.

To this end, the International Olympic Committee (the IOC) has developed and published Internet guidelines for broadcast rights-holders, as well as for those media organisations that have not been granted broadcast rights by the IOC. The guidelines do not permit the audio-visual coverage of Olympic events over the Internet, which is covered by the broadcast licences granted by the IOC and by the IOC News Access Rules. Rather, they allow rights-holders to broadcast press conferences live and to publish still photographs, program schedules and Olympic results on their websites. Non-rights holders have the right to delayed broadcasts of press conferences and can disseminate written and photographic coverage of the Games but are not allowed to create stand-alone Olympic-themed websites to host coverage of the Games.

One of the interesting questions in this area is how the 'fair dealing' provisions under the Australian Copyright Act 1968 (Cth) will be applied in the context of new media. This question was considered by the Federal Court last year (please refer to the copyright article in our July 2007 Intellectual Property Bulletin) but the settlement of that case before a final hearing has left the issue unresolved. The IOC's Supplementary News Access Rules for Australia set out the conditions under which the IOC will permit news organisations to broadcast Olympic material on the Internet within Australia. Any broadcasts under these Rules must be 'geoblocked', that is, access to the material must be restricted to Internet users in Australia.

Blogging

The widespread use of blogging as a communication tool continues to grow and it has now been given an official place in the sporting world, with the IOC for the first time allowing Olympic athletes to maintain personal blogs during the Beijing Games. The IOC and the Australian Olympic Committee (the AOC) have each published blogging guidelines (the AOC's guidelines are in addition to the IOC's), which make it clear that any blog must be confined to an athlete's personal Olympic-related experience and remind athletes that they can be held personally liable for any content that they post which is defamatory, obscene or otherwise infringes a third party's rights. The guidelines only apply during the period of the Olympic Games, including the eight days before the Opening Ceremony and three days after the Closing Ceremony.

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Trade mark developments in China

In brief: Recent trademark developments in China reflect a significant governmental commitment to the streamlining and enforcement of intellectual property rights. Legislative amendments are underway, as the Chinese Government revises the Trademark Law of the PRC. Further, with the Olympic Games approaching, China has implemented specific regulations designed to protect the Olympic symbols.

By Jimmy Huang, Lawyer, and Ted Marr, Practice Manager – Greater China Intellectual Property

Regulations to protect the Olympic symbols

In anticipation of the Olympic Games, the Chinese Government has adopted a series of regulations and measures that aim to protect the Olympic symbols against unauthorised use. The new rules include the Regulations on the Protection of Olympic Symbols and the Rule concerning the Protection of Olympic-Related Intellectual Property Rights. Most of these measures relate to enforcement procedures and do not materially affect the trade mark registration process.

The Chinese Government has also initiated a number of special measures that target the infringement of Olympic symbols. In order to encourage Chinese citizens to assist in protecting the Olympic symbols, the Beijing Administration for Industry and Commerce has released Methods for Awarding People Reporting Infringement of the Olympic Symbols, which entitles people reporting infringements to the government to receive an award of up to RMB100,000 (A$15,267) on the condition that certain requirements are satisfied. In addition, on 15 March 2008, the Beijing Organizing Committee for the Games of the XXIX Olympiad announced the Proposal for Regulating Ambush Marketing. This regulation clearly prohibits several types of marketing. For instance:

• At Olympic events, spectators will be monitored. Individuals will only be allowed to consume food and drinks provided by authorised sponsors (for example, McDonald's and Coca-Cola), and officials will ask groups wearing clothing with the same logo to hide the brand name.
• The advertisements of Olympic sponsors will be given priority at Beijing's prominent advertising sites from 11 July to 17 September 2008. These sites include the areas around Olympic venues, main roads, railway stations and the airport.
• Without special authorisation and approval, all advertisements featuring participants in the Beijing Olympics (including athletes, coaches and officials) will be suspended from 1 to 27 August 2008.

Amendments to trademark legislation

China is currently amending the Trademark Law of the PRC with the aim of more comprehensively protecting trade mark owners' rights, in terms of both registration and enforcement procedures. The modifications are still at a preliminary stage, and the draft Bill has not yet been publicly released. The Chinese Government's ongoing refinement of its legislative provisions constitutes a clear acknowledgement of the importance of trademark law.

Ted Marr and Jimmy Huang work in our new Beijing IP Office, Allens Arthur Robinson Intellectual Property (Beijing) Limited (安德慎知识产权代理（北京）有限公司).

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Protecting an athlete's identity and image through trade mark registration

In brief: Registration of an athlete's name, signature and/or image as an Australian trade mark provides an athlete with a simple and cost-effective way of enforcing their rights in connection with unauthorised use of the athlete's identity and image. It also enables appropriate intellectual property enforcement strategies to be tailored to protect the interests of sponsors, authorised licensees and event organisers, in circumstances where the athlete's identity and/or image is being used 'as a trade mark' without the consent of the athlete.

By Tim Golder, Partner, and Daniel Spirdonoff, Senior Associate

Mentioning the names Michael Jordan, Tiger Woods or Michael Schumacher will undoubtedly invoke instant recognition of some of the world's greatest athletes. Indeed, many millions of dollars of sponsorship money has been spent by some of the world's biggest companies creating and promoting brands involving, or directly linked with, these athletes. Such investment confirms how valuable an athlete's identity and image can be – both to the athlete (through sponsorship revenue) and to the sponsor (through brand recognition and merchandising revenue). Such value makes it important for athletes to ensure they have appropriate intellectual property protection of their identity and image so that they can quickly, easily and effectively take action in connection with any unauthorised use of the athlete's identity or image.

The Trade Practices Act 1974 (Cth) will provide an athlete with recourse against unauthorised use of the athlete's identity or image if such use is misleading or deceptive (or is likely to mislead or deceive), or if such use falsely represents a sponsorship, approval or affiliation with the athlete. However, these actions are premised on the athlete having such a reputation in Australia that ordinary members of the public would assume that the unauthorised activity does, in fact, have a connection with the athlete - and proving reputation in court can often be an unnecessarily time-consuming and costly exercise.

A simpler and more cost-effective way for an athlete to add to the potential protection for their identity and image is through trade mark registration. An athlete can file applications to register their name (assuming it is distinctive – eg not John Smith), signature and/or image as trade marks in Australia, and in other jurisdictions around the world. Once registered, an athlete can take action in connection with any infringement of his or her trade mark(s) – that is, in connection with any unauthorised use of the trade mark(s) or of any trade mark that is substantially identical with, or deceptively similar to, the trade mark(s) (provided always that the unauthorised use is use as a trade mark – meaning that editorial, or descriptive use of an athlete's name, signature and/or image, or a photograph of an athlete performing (for example) may not be an infringement). The mere registration of the trade mark(s) provides the athlete with enforceable rights and there is no need to first establish any reputation in court proceedings.

This can have great benefit from a practical perspective. For example, if there is a real risk of counterfeit merchandise being sold at or near an event at which the athlete is appearing, trade mark enforcement strategies can be tailored in such a way as to prevent the counterfeit merchandise from being sold during the event period (and, in some cases, even extend to procuring the forfeiture of the counterfeit merchandise), thereby protecting the legitimate interests and revenue streams of sponsors, event organisers and licensees selling authorised merchandise. In this way, trade mark registration of an athlete's name, signature and/or image can provide additional comfort to an athlete's sponsor(s) that their sponsorship dollar is being protected in the best possible way.

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Sponsorship: an athlete's perspective

In brief: Sponsorship for an athlete is often perceived by the public as the stripes on the athlete's tracksuit or the breakfast cereal he or she eats, but the value in sponsorship for athletes and sponsors extends well beyond this.

By Rosie Hooper, Lawyer

I was an athlete, I am now a lawyer and there was a time when the two intersected. In an amateur sport, sponsorship created opportunity by supplying the tangible things I needed to be a better athlete but could not otherwise afford. Additionally, sponsorship gave an added sense of legitimacy to my goals, professionalism to my routine and, ultimately, brought results.

Sport is a valuable commodity. As an elite athlete, I was part of a much bigger commercial picture and, beneath the layers of official sponsors, suppliers and licensees of events, governing bodies and teams, it was a challenge to determine what I could legally and practically offer an individual sponsor without breaching rules or regulations.

Athletes representing Australia at major events must first sign comprehensive team membership agreements. Such agreements contain provisions restricting athletes from making commercial use of their image in a way that will compete or conflict with sponsors, suppliers and licensees. The restrictions are in place for the event itself and for a period pre- and post-event. For sponsored athletes, these restrictions may directly conflict with individual sponsorship agreements already in existence, unless necessary carve outs are put in place before the agreement is executed. At the very least, these restrictions may dilute the brand exposure that a sponsor expects.

While it is important for sponsors to be aware of contractual arrangements that may operate alongside or adversely affect their sponsorship arrangements, it is also important to appreciate the value that an athlete can bring to their brand, beyond tax incentives and community goodwill.

Signing the right athlete can buy sponsors additional avenues of brand exposure and, by association, give their brands a positive, successful and healthy image. In this sense, it is important for sponsors to decide the right 'fit' for their business, bearing in mind a target market. This may require creativity in marketing and thinking beyond and/or subverting the stereotypes. Australian track and field's 'pin up' boy, Scott Martin, is the perfect example. Not sure who he is? Think Australian discus thrower and Commonwealth Games gold medallist. Still unsure? Think NAB television advertisement featuring a burly, bald, discus-throwing ballet dancer. A marketable brand can be built around an athlete or a team very successfully, not just the reverse.

While success of a sponsored athlete is no surety, the value you can build into a sponsorship agreement is. Companies can claim vicarious insight into the real world of elite sport - athlete appearances at corporate and client events are a great way of value-adding to a sponsorship arrangement. Success aside, an athlete's recount of a standard day in the athletes' village at a major event can make entertaining listening at corporate or client functions.

Rosie represented Australia in athletics (javelin throwing), was a dual Australian champion, and was a finalist in the javelin at the 2006 Melbourne Commonwealth Games.

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Allens top in recent IP client survey

We are pleased to announce that, in the recent 2008 client survey conducted by Australasian Legal Business (as published in ALB Guide: IP 2008), Allens has come out on top for what clients described as 'all-round excellence in all IP matters'. Allens was considered by clients to be the 'undisputed market leader in IP law'. We are dedicated to assisting our clients with their IP needs and we would like to thank our clients for their support.
 
In recognition of our world-class IP service, Allens has recently been voted:

• Leading Australian IP Firm 2008 – Chambers Global: The World's Leading Lawyers
• Leading Australian Patent Litigation Firm 2008 – Managing Intellectual Property
• Leading Australian Trademark Litigation Firm 2008 – Managing Intellectual Property
• Leading National IP Firm 2008 – Australasian Legal Business
• Leading Australian IP Firm 2007/08 – Asia Pacific Legal 500

Allens Sports Practice

For more information on our Sports Law Practice, please refer to our Sports eBrochure.

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ANZSLA conference

Allens Arthur Robinson is a Supporting Sponsor of the Australian and New Zealand Sports Law Association's (ANZSLA) annual conference, to be held in Melbourne in October 2008. ANZSLA has a diverse membership of sports administrators, lawyers, academics and students throughout Australia, New Zealand and other parts of the world and is well known for its publications and annual conferences on sports law issues of current interest. Allens has had a close relationship with ANZSLA for many years. This year, the conference theme is 'Sport: A Political Football'.

Footnotes

1. These are essentially the definitions provided by Sandler & Shani, 'Olympic Sponsorship v Ambush Marketing: Who Gets the Gold?', Journal of Advertising Research, Aug/Sept 1989 with some enhancements.
2. Raguz v Sullivan (2000) 50 NSWLR 236.
3. http://www.tas-cas.org (General Information).
4. http://www.tas-cas.org/d2wfiles/document/437/5048/0/stats2007.pdf (Table 1 - Statistics).

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For further information, please contact:

Jim Dwyer Partner, Sydney Ph: +61 2 9230 4873 Jim.Dwyer@aar.com.au		David Yates Partner, Sydney Ph: +61 2 9230 4176 David.Yates@aar.com.au
Tim Golder Partner, Melbourne Ph: +61 3 9613 8925 Tim.Golder@aar.com.au		Peter James Partner, Brisbane Ph: +61 7 3334 3360 Peter.James@aar.com.au
Ted Marr Practice Manager – Greater China Intellectual Property, Beijing Ph: +86 10 8518 8128 Hong Kong Ph: +852 2903 6210 Ted.Marr@aar.com.au

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