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Advertising & Marketing Law: The vital importance of clearing pre-existing material (part 1)

15 July 2020

#Technology, Media & Telecommunications

Advertising & Marketing Law: The vital importance of clearing pre-existing material (part 1)

If you’ve been following events out of the United States lately, you may have noticed that the Trump campaign has faced a few challenges from famous musicians regarding its use of popular music at its campaign rallies. Why? Well, it seems the campaign failed to ask the permission of the musical copyright owners.

While piggybacking off existing material to market a new product or service isn’t new, the Trump story serves as a useful reminder of the critical importance of clearing any third party content featured in your advertising, whether music, images or personalities. As technology and digital tools improve, the timeline from creative concept to campaign launch is continuing to shorten, leaving less and less time for clearance work while also making it easier than ever to identify misappropriation online.

What is pre-existing material?

It is common for advertisers to incorporate third party materials into their advertising campaigns.  Associating a new product with an existing brand, a popular song or a well-known celebrity is a tried-and-tested method for increasing market penetration – take Roger Federer (whose image has been used to market Rolex, Mercedes-Benz, Lindt, Gillette and a multitude of others) or the AC/DC anthem “Thunderstruck” (featured in commercials for Apple, Holden and Colonial First State super). 

The trouble arises where advertisers fail to obtain permission to use that material, whether it be an artistic or literary work (such as film, TV or music), photo, image, brand or character. As advertising continues to diversify across different mediums, these issues are becoming increasingly common not only in broadcast or print, but also across digital and social media (in particular social influencers, who are often unaware of the risks).

A problem will also arise if a limited clearance has been granted – for example, to use photographs for a client pitch – but no additional clearance is obtained when the campaign is communicated to the wider public.

What are the risks of failing to clear?

Failing to obtain permission when using third party content can attract claims from all sides, whether it’s a regulator, a consumer or the third party themselves. We set out the primary risks associated with failing to clear content in Australia below.

Misleading or deceptive conduct

The Australian Consumer Law (ACL) provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive. It also contains prohibitions against making false or misleading representations that goods or services have been sponsored, or acquired by a particular person. Where an advertisement showcases a product or service in conjunction with a well-known brand or person, it is likely that the public or a consumer will believe or infer an association or endorsement by that brand or person. In the absence of appropriate permission, that representation may be considered false or misleading.

Even if an ad does not contain an exact copy of pre-existing material or a photo of a celebrity, the use of material which is very similar or a similar likeness (for example, using a celebrity look-a-like model), it may still be misleading and deceptive by suggesting an association or affiliation with that pre-existing material or celebrity.

Australian burger chain “Down-N-Out” felt the sting of the ACL earlier this year, after the Federal Court held it engaged in misleading and deceptive conduct through its choice of name, which sought to attract customers based on a perceived affiliation with the American burger chain “In-N-Out”.

Passing off

Passing off is a common law (rather than statutory) action. Similarly to the above, a claim for passing off may arise where someone incorrectly suggests a connection or affiliation between a product or service and those of another person (or the person themselves). In Australia, people do not have a “right” to their own image. However, celebrities or well-known individuals who accrue goodwill in their name or reputation (and may therefore suffer loss or damage through the misappropriation of their image or personal brand) can rely on passing off as a means of enforcement and recovery. In practice, passing off actions in Australia are almost always brought under the ACL.

In 2012, clothing brand Topshop produced a t-shirt featuring an image of Rihanna on the front.  Topshop had obtained licence from the image photographer, but had not received permission from Rihanna herself. She commenced and was successful in passing off proceedings. Ariana Grande pursued a similar action against retailer Forever 21 for its use of a look-a-like model to market its brand after Ms Grande refused an endorsement request.

Copyright

Copyright is a body of rights and protections that exists automatically in creative works to enable the creator to control and protect how their creative work (whether artistic, literary, dramatic or musical) is used. It confers on them the exclusive right to, among other things, reproduce, publish and communicate that work. While these rights can be licensed and permissioned on request, uncleared reproduction, replication or republishing may constitute copyright infringement.

In 2014, Ita Buttrose successfully sued an aged care provider for copyright infringement, passing off and misleading and deceptive conduct following the use of her image on their website without consent. Damages in excess of $225,000 were awarded to Ms Buttrose, and $200,000 to her company.

Particular care needs to be taken when seeking to reproduce even a very small segment of pre-existing audio or visual material. The law of copyright considers the quality rather than quantity of what is being reproduced, and even a few seconds of a well-known song may infringe the copyright of the composer, publisher, performer and record company who may each bring proceedings for copyright infringement.

Enforcement

Businesses who fail to clear and obtain permission to use third party content may find themselves vulnerable to aggressive enforcement action by companies, artists and celebrities seeking to protect their brand and their right to monetise it. Enforcement may take the form of injunctions, corrective advertising orders, penalties and damages claims. Often, the greater risk to businesses is the intangible – the reputational damage and the loss of consumer trust that may arise from a successful claim of misleading or deceptive conduct against a well-known company or brand.

Key takeaways

The above issues are common, but easily avoidable. The use of third party material should trigger a red flag in the process of developing ads, ensuring the issue is raised for consideration and steps are taken to confirm if permission has been obtained, or to assess the risk of proceeding without it. The earlier the intervention, the lower the cost. Reaching out for legal advice at concept stage will allow you to assess the risk early on, make an informed decision as to how to proceed and to cost and budget accordingly.  Leaving clearance requests to the last minute means they often come with a higher price tag, and a rejection can send you back to square one. Obviously, the worst possible time to clear pre-existing material in a television commercial is after the commercial has been completed.

Prudent advertising and marketing professionals abide by the rule – if you can’t clear it, don’t use it.

Authors: Ian Robertson AO & Georgia Milne

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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