Bills Digest No. 52 1999-2000 Intellectual Property Laws Amendment (Border Interception) Bill 1999


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WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details

Passage History

Intellectual Property Laws Amendment (Border Interception) Bill 1999

Date Introduced: 25 August 1999

House: House of Representatives

Portfolio: Industry, Science and Resources

Commencement: Royal Assent

Purpose

To amend the Sydney 2000 Games (Indicia and Images) Protection Act 1996 and the Trade Marks Act 1995 to enable the CEO of Customs to determine, under those Acts, the 'designated owner' of imported goods.

Background

The Sydney 2000 Games (Indicia and Images) Protection Act 1996 (the Sydney 2000 Games Act) protects official sponsors of the Sydney Olympic and Paralympic Games from 'ambush' or 'parasitic' marketing practices by commercial rivals. The legislation also empowers the Australian Customs Service to seize goods suspected of contravening the legislation.

Ambush Marketing

'Ambush', or 'parasitic' marketing is a term used to denote:

the unauthorised association by businesses of their names, brands, products or services with a sports event or competition through any one or more of a wide range of marketing activities; 'unauthorised' in the sense that the controller of the commercial rights in such events, usually the relevant governing body, has neither sanctioned nor licensed the association itself or through its commercial agents.(1)

Essentially, corporations using ambush marketing are trying to reap a commercial benefit by associating themselves with a particular event, without paying the price. The Joint Submission by the NSW Government and the Sydney Organising Committee for the Olympic Games (SOCOG) to the Senate Legal and Constitutional References Committee on Ambush Marketing gave examples of how they believed these campaigns had been run in the past. (It is important to note, however, that some of the companies accused, including GMH, denied the allegation.)

  • The Nike/Reebok 'Sneakers War'. During the 1992 Barcelona Summer Games, members of the gold-medal winning USA basketball 'Dream Team' with personal sponsorship from Nike, threatened to boycott the medal presentation rather than wear the official team uniform featuring Nike's rival, Reebok.
  • Also during the Barcelona Olympics, GMH advertised that it would give a Golden Holden to any gold medal winner, despite Toyota's exclusive deal.
  • During the Seoul Summer Games in 1988, a T-shirt manufacturer designed a logo 'Body and Seoul' in honour of 'the Summer Games'.
  • During the 1994 Lillehammer Winter Games, Wendy's hamburger chain, a rival of sponsor McDonald's, paid for air time during the telecast to promote itself by using spoofs of winter sports, while carefully avoiding mention of the Olympics.(2)

To protect official sponsors from these sorts of attacks, the Sydney 2000 Games (Indicia and Images) Protection Act 1996 set up a licensing scheme limiting the use, for commercial purposes, of a range of words, phrases and images. The scheme prohibits an unlicensed company from using words, phrases or images to suggest a sponsorship arrangement with the games or other support for them. The list includes: 'games city', 'millennium games', 'Sydney games', 'Sydney 2000', any combination of the words 'games' and '2000' (or 'two thousand'), 'Olympiad', 'Olympic', 'share the spirit', 'summer games', 'team millennium'; the use of the word 'Olympian' or 'Olympic' with 'gold', 'silver' or 'bronze'; the use of any visual or aural representation representing a connection with the Olympic or Paralympic Games.

Included in the list, at sub-section 8(c) is any combination of the words '24th' (however spelt or represented) and 'Olympic' or 'Games'. The Sydney 2000 Olympic Games are officially described as the Games of the XXVII Olympiad (not the 24th Olympic Games). The term Olympiad designates the period of four successive years which begins with the Games of the Olympiad, includes the Olympic Winter Games, and ends with the opening of the Games of the following Olympiad. The Olympiads are numbered consecutively from the first Olympic Games of modern times, held in Athens in 1896. The principal legislation would therefore appear to permit products to be produced with a combination of the words '27th' and 'Olympiad'.

Exemptions

The Sydney 2000 Games Act contains a number of exceptions allowing:

  • for the continued operation of rights and liabilities under the Trade Marks Act 1995, and
  • the provision of factual information, criticism and review of the Games, such as in newspapers, magazines and broadcasts.

The exemption for factual information is an important difference between the Sydney 2000 Games Act and an earlier Act, the Australian Bicentennial Authority Act 1980 (Cwth). The earlier Act tried to limit the use of a wide range of words in the run up to the 1988 Bicentennial year, including '1788', '1988', or '88' in conjunction with 'Sydney' or 'Melbourne'. In Davis v Bicentennial Authority(3) the High Court ruled that the net had been cast too wide, pointing out that the use of 'Family Law Conference Melbourne 1988' would have infringed the legislative scheme. The Court said that the legislation allowed the Authority to regulate the use of common expressions, and made unauthorised use a criminal offence.

In his Second Reading Speech on this Bill, the Parliamentary Secretary, Hon Warren Entsch, stressed that the Sydney 2000 Games Act does not affect the community's fundamental right to freedom of expression. He said that '[t]his is particularly the case in relation to words that have passed into common language. It must therefore be emphasised that restrictions on the use of games indicia and images apply only to unlicensed commercial use of the protected indicia and images'.(4)

Exemptions for Sporting Bodies

The Second Reading Speech on the Sydney 2000 Games Bill made it clear that the Act is not intended to limit the 'reasonable needs' of sporting bodies to raise money and promote their athletes in the lead-up to the Olympics and Paralympics. Nevertheless, the Government still recommends that these bodies negotiate Memorandums of Understanding with Games organisers as a safeguard if they intend to use protected words, symbols or images. This is prudent advice given the very wide scope of the obligation imposed by the Host City Contract, and the lack of a specific exemption in the Sydney 2000 Games Act for sporting bodies.

The Host City Contract requires that Sydney (as Host City), the Australian Olympic Committee (AOC) and SOCOG ensure that there are no other marketing programs in the country relating to the Games. In particular:

they shall ensure that no marketing programmes organised by one or more national federations, sports organisations or any other public or private entity in the Home Country shall refer to the Games, any Olympic team or the year of the Games, imply any connection with the Games, any Olympic team or the year of the Games. The City shall ensure that no sponsorships or marketing rights identified with the City, the Games or the period in which the Games will be held shall be granted without prior approval of the IOC Executive Board.(5)

Paying for the Games

The Sydney Olympic Games will cost more than $2 billion dollars to stage.(6) Commercial sponsorship is expected to provide a large slice of that - $840 million according to recent estimates(7). Sponsorship targets have fluctuated. The initial target set in 1993 was $622 million, growing to $873.7 million in 1998, but cut to $840 million in 1999. It was reported in early August 1999 that approximately $700 million had been raised in sponsorship. The shortfall of $140 million consists mostly of local sponsorship because The Olympic Program (TOP) international sponsorship that is negotiated by the IOC has been secured or is to be signed in the near future.(8) Principal international Olympic sponsors pay about $US40 million per category for exclusive rights.(9) All sponsors will want to be sure of getting their money's worth before they sign up. In addition, the Host Country is obliged to provide adequate protection for sponsors, under the terms of the contract between the Host City Sydney, the Australian Olympic Committee and SOCOG.

Other sources of revenue for the Sydney Games are television rights (over $1 billion(10)), ticket sales ($343 million from the first round of sales to Australians(11)), and consumer products (estimated at $65.2 million in 1998(12)).

Interception of Parasitic Imports

Part 4 of the Sydney 2000 Games Act includes provisions to restrict the importation of goods that seek to ambush sponsorship arrangements so that the revenue anticipated from sponsorship may be preserved. These border interception provisions enable the Australian Customs Service to seize imported goods that have Sydney 2000 Games indicia or images applied to them, when it appears to the Chief Executive Officer (CEO) of Customs that the designated owner is not authorised, or licensed under the Act, to use the indicia or images for commercial purposes.

Having seized the goods, the Australian Customs Service (Customs) is obliged to advise both the designated owner of the goods, and the relevant organising committee or licensed user. The organising committee or licensed user then has ten days following seizure to commence infringement proceedings.

The Current Amendments

This Bill is intended to correct a perceived discrepancy in the border interception provisions of the legislation. At present section 29 of the Sydney 2000 Games Act defines the 'designated owner' as the person identified as the owner of goods in the import entry made in relation to the goods under section 68 of the Customs Act 1901. Section 68 of that Act excludes several types of goods from the general requirement to be entered, including goods consigned by post worth less than $1000, or goods worth less than $250 consigned by other means. Goods which are not entered do not have a designated owner, and as a result, Customs cannot seize them because there is no designated owner to notify.

The effect of the proposed amendments is to empower Customs to determine that a person is the owner of goods, thereby enabling them to seize all imported goods that are subject to a notice of objection and seek to ambush games marketing. In his Second Reading Speech the Parliamentary Secretary stressed that the amendments made by this Bill are intended only to apply to goods that are used for commercial purposes, and not to goods imported for personal use.(13)

Main Provisions

Amendments to the Sydney 2000 Games (Indicia and Images) Protection Act 1996

Item 2 inserts new section 29A which allows the CEO or an officer of Customs to determine that a person is the 'designated owner' of goods, if that person is an 'owner' within the meaning of subsection 4(1) of the Customs Act. The definition of an owner in respect of goods in subsection 4(1) of the Customs Act states:

'includes any person (other than an officer of Customs) being or holding himself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods'.

Item 1 then amends the definition of 'designated owner' in Section 29, so that where no-one is identified as the owner of goods on the import entry, then the 'designated owner' is the person so determined in accordance with new section 29A.

Amendments to the Trade Marks Act 1995

The effect of items 1 and 2 is to make a similar amendment to the Trade Marks Act.

Endnotes

  1. Senate Legal and Constitutional References Committee, Cashing in on the Sydney Olympics: protecting the Sydney Olympic Games from ambush marketing, March 1995, p 22.

  2. ibid., pp. 24-27.

  3. 1988 63 ALJR 35.

  4. Second Reading Speech, Intellectual Property Laws Amendment (Border Interception) Bill 1999, House of Representatives Debates, 25 August 1999, p 6928.

  5. Senate Legal and Constitutional References Committee, op. cit., p 16.

  6. Second Reading Speech, Intellectual Property Laws Amendment (Border Interception) Bill 1999, House of Representatives Debates, 25 August 1999, p. 6928. The NSW Audit Office's Review of Estimates shows that the net cost to the NSW Government of the Sydney Olympics and Paralympics is estimated to be $2,309 million out of a total Games Budget of $5,916.6 million. NSW Audit Office, Performance audit report: the Sydney 2000 Olympic and Paralympic Games: review of estimates, 1998, p 58.

  7. 'Games funds chief resigns', Australian Financial Review, 6 August 1999, p 6.

  8. NSW Audit Office, Performance audit report: the Sydney 2000 Olympic and Paralympic Games: review of estimates, 1998, p 64.

  9. Senate Legal and Constitutional References Committee, op. cit., p 57.

  10. Sydney Morning Herald, March 21, 1996.

  11. 'Final tally indicates over one million Australians have applied for Games tickets more than one year out', SOCOG Press Release, 15 August 1999.

  12. NSW Audit Office, op. cit., p 64.

  13. Second Reading Speech, Intellectual Property Laws Amendment (Border Interception) Bill 1999, House of Representatives Debates, 25 August 1999, p 6930.

Contact Officer and Copyright Details

Rosemary Bell
31 August 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1999

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1999.

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