Telstra engaged in "ambush marketing" by associating itself with the Olympics brand in its "I go to Rio" advertising campaign without purchasing the rights to do so, counsel representing the Australian Olympic Committee (AOC) told the Full Federal Court on Monday.
The legal battle between the AOC and Telstra began in July 2016, weeks before the Rio de Janeiro Olympic Games opened on August 5.
On July 29, the Australian Federal Court ruled in favour of Telstra, with Justice Wigney dismissing the application by the AOC to force Telstra to halt its Rio Olympics-themed advertising campaign, which included a television commercial featuring a modern version of Peter Allen's song I Go To Rio.
The AOC has since appealed the decision to the Full Federal Court.
On Monday, the committee's counsel, Tony Bannon, SC, maintained that Telstra had used a "protected Olympic expression" demonstrating "sponsorship-like" association with the Olympics without purchasing a licence from the AOC as required under the Olympic Insignia Protection Act (OIPA).
"A key element in understanding the primary judge's error in approach -- and the overall error in conclusion -- is the recognition that suggesting you are a supporter of the Olympics and teams is brand advantageous," Bannon said.
The "I Go to Rio" television commercial, which included Telstra's logo and the words "Official Technology Partner of Seven's Olympic Games Coverage", was played in court.
Bannon argued that "dominant" Telstra branding in the Rio Olympics-themed television commercial suggests that the telco engaged in "ambush marketing", a practice by which companies attempt to associate their products or services with a high-profile event for commercial benefit without paying to become an official sponsor of that event.
"Telstra is not tying itself to the Seven brand, but the Olympics brand," Bannon argued.
He added that consumers would assume Telstra, which previously sponsored the Olympic games, had once again paid for the rights to associate itself with the brand and not "gone rogue".
Telstra's rival telecommunications provider Optus signed on to be an official sponsor of the Rio Olympics in late 2015.
Bannon said the significance of the appeal goes beyond the AOC's position in the matter; that to allow Telstra to engage in such practices is to "diminish the value of the licence".
"To extract maximum revenue from a [buyer] such as Optus, it needs to be able to satisfy Optus and, going forward, any future [buyers] that the exclusive rights they [AOC] give them will not be detracted from in the way we say Telstra has done and not end up in a position, in a bidding debate, with the bidder saying 'well that's interesting but look what Telstra was allowed to do in the last occasion', hence diminishing the value of the licence," Bannon said.
Counsel for Telstra, Anthony McGrath, SC, told the court on Monday that the advertisement revealed "the truth of its commercial arrangements with Seven".
Referring to Section 22, Subsection C in the OIPA [PDF], McGrath said the only protected Olympic expression emerged at the end of the television commercial, where the words "Olympics" and "Olympic Games" were used in the voiceover and supporting text.
"One does not find a protected Olympic expression at any point right up until the conclusion of the advertisement, because nothing to do with the song, nothing to do with any of those people who were participants in the ad, nothing to do with any of the visuals could possibly be in contravention of this Act," McGrath said.
He added that on every occasion the protected Olympic expression was used, it was "closely tied" to Seven and the Olympics by 7 app, and that consumers wouldn't reasonably deduce otherwise.
"It's not enough to say there's an association with the games, it's not generalised support ... every single use of 'Olympics' is not the use of Olympics at large. It is always tied to the notion of Seven's Olympic games coverage or the Olympics on 7 app," McGrath said. "It is used as part of the compound expression; it couldn't be taken to reasonably be anything else beyond that.
"The only sponsorship arrangement that's being reasonably suggested here is one of Telstra's sponsorship of Seven's coverage, of partnering with Seven, not being in a generalised sense an Olympic sponsor."
McGrath reminded the court of the primary judge's emphasis on what was missing in the advertising material.
"What is missing from this advertisement are all the things that one would expect to see if, in fact, you did have a form of sponsorship of the Olympic games," McGrath said.
"You would have the Olympic athletes, you would have Olympic games footage, you would have the rings, you would have the torch, you would have all the motifs that one famously associates with the Olympics.
"The fact that they're not there and the fact that [Telstra is] described as being simply a technology partner of Seven is quite telling when one looks at how is it that the protected Olympic expression is being applied here."