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Monday, 20 September 1999
Page: 9989


Ms JULIE BISHOP (8:41 PM) —Almost six years ago to the day, on 23 September 1993, Sydney was elected by the International Olympic Committee to be the host city to stage the games of the 27th Olympiad in the year 2000. Also on that day, almost six years ago, the City of Sydney and the Australian Olympic Committee signed the host city contract with the IOC. The IOC, of course, is the international body established under Swiss law to guard and retain all the rights relating to the Olympic Games throughout the world and is the supreme authority for the Olympic movement. The host city contract sets out in considerable detail the IOC requirements for the staging of the Sydney 2000 Olympics. In addition to the host city contract, the Olympic Charter and the endorsement contracts provide the governing rules and requirements for staging the 2000 Olympics.

The past six years have seen enormous activity within Australia in preparation for the staging of the games. The New South Wales and federal governments are directly providing substantial funds. In fact, the federal government is making a major contribution to the games. It is apparent that the success of the games means much more to Australia than just hosting the Olympics in the city of Sydney. Of course it means ensuring that Australian athletes can compete in the premier international sporting event in front of a home crowd and it means that Australians will have the opportunity to experience once more the Olympic Games in their own country. But it also means an enormous boost to the Australian economy, particularly from tourism. The games will provide unparalleled opportunities to Australian businesses.

The federal government has moved quickly in supporting the games, including providing cash grants and funding for the Sydney Olympic venues as well as federal funding for the preparation of our athletes. In fact, the federal government is assisting with the staging of the Olympic Games in a wide range of areas including drug testing, security, immigration, customs and quarantine, health care, communications, international air transport and promotions and the like. Likewise, the federal government has provided financial assistance for the Paralympic Games and will continue to support both games over the next 12 months and beyond to ensure that all Australians share the benefits and the opportunities that will be created by hosting one of the world's great sporting events.

One area where the Commonwealth government acted quickly, upon the election of Sydney as the host city, was in the area of legislative protection of the Sydney Olympic Games words, symbols and other indicia. The Sydney 2000 Games (Indicia and Images) Protection Act was passed in 1996. It was designed to protect the Sydney 2000 Olympic and Paralympic Games revenue from being undermined by the unauthorised use of the games indicia and images by corporate competitors of the official games sponsors. SOCOG has already raised something in the order of $700 million from official sponsorships to finance the games; so we can see the magnitude of the effort here and why it is so necessary to protect that revenue. The ability of the games organisers to achieve such targets will depend, to a large extent, on the degree of exclusivity of the indicia and images. The protection of this revenue source is of course of paramount importance to the success of the games.

The legislation before the House this evening—the Intellectual Property Laws Amendment (Border Interception) Bill 1999—seeks to extend the scope of the legislative protection for games organisers which has already been provided in the Sydney 2000 Games act as well as in the corresponding provisions of the Trade Marks Act 1995. Before turning to the specific amendments, perhaps I should take this opportunity to reflect on the importance of the games and thus the intention and impact of the Sydney 2000 Games Act and of the provisions of the Trade Marks Act, both of which are to be amended with the passage of this bill.

The Olympic Games have the capacity to make an extraordinary impact upon not only New South Wales and its economy but Australia as a whole. There have been various reports as to the precise financial impact in terms of contribution to the national GDP, including an often quoted study of the economic impact of the Sydney 2000 Olympics Games by KPMG Peat Marwick released in 1993 as part of Sydney's bid for the 2000 Games. Whatever the actual details, there is no doubt that the 2000 Olympics will add billions of dollars over time to the economy. Who can judge what impact the images of Sydney and of Australia, as portrayed to billions of people in the worldwide television audience, will have next year and for many years beyond the games? There is also no doubt that the games will lead to significant job creation with additional employment throughout Australia, although concentrating on New South Wales and Sydney.

There have been estimates as to the number of tourists who will visit Australia before, during and after the games, and we are all speculating on the positive impact on the current account from the increased tourism exports. Admittedly, we have evidence from past Olympic Games upon which to base any modelling. Huge losses were suffered at Montreal in 1976 but by 1984 the Los Angeles Games had turned a profit. We have had the more recent experience of the Atlanta 1996 Games where the windfall that many business operators anticipated did not eventuate, although, making the appropriate adjustments, it seems that a rough estimate of the total impact of the games was about $US4 billion for Georgia, with about $3 billion of that impact occurring in the year of the games in 1996. Obviously the post-Olympic impact is still being assessed and recorded.

So we in Australia must be focused on determining that the economic activity associated with the games is of the highest possible order, given the past debates and the degree of uncertainty that exists as to the size of the direct Olympic impacts and the estimate of the flow-on impacts. It is against this background that we appreciate the importance of a focus on the regulation of the use for commercial purposes of the indicia and images associated with the Sydney and Paralympic Games. I acknowledge the gracious acceptance by the member for Denison of the significance of this legislative regime, notwithstanding the minor nature of these particular amendments. He did manage to fill his 10 minutes rather eloquently.

The Sydney 2000 Games Act walks a very fine line between protecting the legitimate private interests of investors in the Sydney 2000 Games, the interests of traders who already use Olympic indicia and images, and the right of free speech. Its purpose was to eliminate what is termed ambush marketing, although that is not a term which is used in the act. Put simply, this means the unauthor ised association of businesses with the marketing of an event, such as the Sydney Games, without paying for the marketing rights—so free riding.

It seems that the competitors of official sponsors of major sporting events engage mostly in these activities. In essence, ambush marketing can be effective in creating the perception that the so-called free rider is in fact the official sponsor or an official sponsor. It can have the effect of dissuading official sponsors from continuing their association with the games and can also undermine the value of marketing rights. There have been a number of well-known ambush marketing examples, including the Nike-Reebok sneakers war in Barcelona. Perhaps an even better known example was during the 1992 Winter Games where Visa had paid millions of dollars to be the official sponsor in the credit card category and had advertised that the Olympics `only take Visa', although I think their ads went so far as to say, `If you are going to the Olympics, the ticket collectors do not take Amex.' Amex hit back. American Express is reported to have counted with corrective advertisements, including one they used in France which said `Remember—to visit Spain you do not need a Visa'. Market research suggested that this sort of advertising was effective. While Visa was recognised as the official sponsor by 55 per cent of respondents, American Express was thought to be the official credit card provider by some 30 per cent.

I should point out that Amex defended its approach and justified its advertising as not a form of ambush marketing but a defence of its brand name. That may well be the case. But there are sufficient concerns with the misuse of Olympic words and symbols to suggest moves to protect authorised and licensed users against ambush marketing and to ensure that official sponsorship revenue for the games not be at risk. The Sydney 2000 Games Act lists the rights, indicia and images specified in the act with the organising committees and enables the organising committees to use and to license others to use the indicia and images identified in the act, but for commercial purposes.

Judging by the Atlanta Games experience, the protection provided by the Sydney 2000 Games Act should not be undervalued. It seems that in preparation for the Atlanta Games the relevant authorities in the United States, including the United States Olympic Committee, wrote to some 40,000 establishments throughout the United States warning them that they were illegally using the Olympic name or trademark. So the focus of the principal act is a financial one. It is to protect the interests of commercial sponsors of the Olympics Games and thereby to ensure the financial viability of the games.

In broad terms, the act provides protection to indicia and images which encompass words and expressions associated with the Olympic and Paralympic Games. Indicia and images are taken to be applied to goods and services in the very wide circumstances set out in section 10 of that act. An importer of offending goods is deemed to be the person who has applied the indicia or images to the offending goods and it is the use for commercial purposes that is prohibited by the act. The relevant games insignia and images can be used for commercial purposes only by SOCOG, SPOC and a licensed user under section 12.

Most importantly for the purposes of the bill before the House, SOCOG, SPOC—SPOC being not St Peter's Old Collegians but the Sydney Paralympics Organising Committee—and licensed users have the right to object to the importation of goods that have applied to them the Sydney 2000 Games indicia or images and that a person is identified as the owner of the goods. So both the Sydney 2000 Games Act and the Trademarks Act have extensive provisions dealing with imported goods which contravene the Sydney Games Act. SOCOG, SPOC and licensed users have the right to object to the importation of goods that have applied to them Sydney 2000 Games images. A person must be identified as the owner of the goods under the Customs Act and be not authorised by or licensed under the act to use the goods for commercial purposes. The Chief Executive Officer of Customs is given the power to seize offending goods, which can then be forfeited or released. These sections interact with the injunctions power under section 43.

The main remedies under the act for SOCOG, SPOC and the licensed users are in fact injunctions, corrective advertisements and damages. There is an interesting position in relation to remedies in that, pursuant to section 37, a person having a sufficient interest may be joined as a respondent in an injunction application in relation to seized goods. This may cover cases where the person designated as owner for the purposes of the act is not the real owner in terms of who was intended to deal with the imported goods on arrival in Australia. Wholesalers, distributors and retailers may be deemed to have a sufficient interest to be joined to any proceedings. The court is given power to order that goods be forfeited to the Crown or released to the owner, and to award a compensation in the event that the court decided that the injunction should not be granted.

It is in this area that the bill before the House seeks to address amendments. Specifically, a discrepancy is seen to exist between the seizure powers of the CEO of Customs and his obligation to notify the designated owner of seized goods under the border interception provisions of the two acts. The protection afforded by the border interception provisions in both acts is not automatic. In both acts, before any action may be taken, the CEO of Customs must have received a notice objecting to the importation of goods which are presumably seeking to ambush the games marketing or goods infringing a registered trademark.

At present, section 29 of the Games Act defines `designated owner' as the person identified as the owner of the goods on the import entry made in relation to the goods under section 68 of the Customs Act. Section 68 of the Customs Act excludes several types of goods from the general requirement to be entered, including goods consigned by post worth less than $1,000 or goods worth less than $250 consigned by other means. Goods which are not entered do not have a designated owner, and as such under the current legislative regime Customs cannot seize them because there is no designated owner to notify. The proposed amendments seek to empower Customs to determine that a person is the owner of goods, thereby enabling Customs to seize all imported goods that are subject to a notice of objection and thus seeking to ambush games marketing.

Specifically, the amendment which allows the CEO or an officer of Customs to determine that a person is the designated owner of goods states that the definition of the owner includes `any person 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 of the goods'. It is very wide. Therefore, where no-one is identified as the owner of the goods on the import entry, the designated owner can be so determined by Customs in accordance with that amendment.

There is no doubt that Customs has already seized a significant number of consignments under the border interception provisions, and it is likely to encounter an increasing number of these consignments in the next 12 months in the countdown to the games. Although the amendments are directed to goods consigned by post worth less than $1,000 or goods worth less than $250 consigned by other means, that is, goods that do not have to be entered under section 68 of the Customs Act, considerable numbers of such consignments could occur and could, in a slow but insidious way, undermine the intent of the border interception provisions of the act.

While it will be difficult to determine the scale of economic losses which could result from illegal conduct under the Sydney 2000 Games Act or the Trademarks Act, there is no doubt that infringement of intellectual property rights can have enormous economic consequences. We have seen that, both here and overseas. Counterfeiting and piracy alone have been estimated to cost Australian industries around $400 million a year—and this is not related to the Sydney 2000 Games. At a global level, the International Trade Commission estimates that infringement of intellectual property rights is costing at least $US60 billion a year in lost sales, and these figures are on the rise worldwide. It is important, against that background, to ensure that we give the greatest level of protection for the Sydney Games and its all-important sponsorship. I commend this bill to the House.