Who owns your #hashtags?

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Hashtags have become a powerful social media marketing weapon in the battle for consumer attention and brand engagement online. Thanks to the indexing power of the lowly hash symbol (#) on social media, it is now common for hashtags to take centre stage in the development and execution of advertising campaigns as a tool that can place a brand at the centre of customer conversations.HASHTAG

But while marketers and brands have been effective early adopters of hashtags, the law, as always, has been slow to adapt. In the world of intellectual property and marketing law, the hashtag phenomenon has numerous implications, raising interesting questions such as who ‘owns’ hashtags and how does the law help brands to protect them.

What is a hashtag?

For those who are late to the party, a hashtag is simply a keyword or phrase preceded by the hash symbol (#). Their use was popularised in social media by Twitter when the platform formally adopted hashtags as a means of indexing tweets. They are now a feature of most social media platforms, including Instagram and Facebook. Hashtags categorise messages by aggregating all posts with the same hashtag in real-time, allowing users to search and view related content, for example, to pick some of our favourite topics, #copyright or #defamation (we admit it, we are #nerds).

Hashtags are commonly used to describe or ‘label’ a social media post, for example, someone interested in flying might use the hashtag #pilot. Hashtags also often take on a life of their own and go beyond mere descriptors. For example, hashtags have sometimes become the de facto slogans or taglines at the centre of many online conversations and social media movements, such as the recent #destroythejoint and #illridewithyou movements in Australia, acting as a loudspeaker amplifying the conversation.

How are marketers using hashtags?

The power of hashtags as an indexing tool has not been lost on savvy brands and their marketing agencies, who have witnessed online conversations develop organically around popular hashtags, without the need for excessive media spending. Developing a ‘viral’ hashtag that leads to increased engagement, traffic and sales can be thought of as the holy grail of social media marketing.

Encouraging the growth of popular hashtags is also big business, with a growing number of brands and agencies partnering with increasingly powerful social media influencers – ‘trend setters’ with large followings on social media – who are paid to post content about the brand’s products and services and get the social media conversation started. Effective hashtag campaigns can also have public relations value, with ‘viral’ campaigns commonly the subject of news reports in the mainstream media, expanding a brand’s reach even further.

There are countless examples of where brands and other organisations have done it well. Famous recent examples include:

  • #SFBatKid, where the city of San Francisco was transformed into Gotham City to grant a Make-A-Wish dream for a 5-year-old cancer patient, who became BatKid and had to save the city from villains while millions of people followed along on social media using the #SFBatKid hashtag. The #BatKid and #SFBatKid hashtags were reportedly tweeted more than 545,000 times in three days and Make-A-Wish saw an enormous boost in website traffic during the peak of the campaign.

 

  • Calvin Klein’s #MyCalvins campaign, which encouraged Instagram users to upload photos in their Calvin Klein underwear with the hashtag #MyCalvins. As part of the campaign, the brand engaged more than 100 social media influencers to contribute to the hashtag, boosting the conversation. The campaign generated over 179,000 photos and proved effective in capturing attention and encouraging online engagement.

 

  • The Air New Zealand and Qantas #AirlineWager campaign, which saw the rival airlines agree to a ‘friendly’ wager over the result of the 2015 Rugby World Cup final, with the loser’s staff to wear the winning team’s uniform the day after the match (unfortunately for the Aussies, the #allblacks won – you can see the results here. The campaign was covered extensively in the press without the need for any media expenditure.

 

Social media platforms: the rules of engagement

The popularity of hashtags as a marketing tool has developed as a result of their role as an indexing system on social media. While the system itself is owned by the relevant platform, specific hashtags are generally subject to the same ownership rules as other content posted on social media.

Generally speaking, social media platforms do not claim ownership of user content, but their terms of use usually include a licence for the platform to use the content in certain, and often very broad, ways. Instagram, for example, expressly states in its Terms of Use that “Instagram does NOT claim ANY ownership rights” in content posted on Instagram, but users do grant to Instagram a non-exclusive, fully paid and royalty-free, worldwide, limited license to use the content in any media formats through any media channels (other than content that is not shared publicly, which will not be distributed outside Instagram).

While the social media platforms themselves do not claim ownership over the actual wording of a particular hashtag, the person who creates the hashtag does not automatically have the exclusive right to use it. Such a claim could only be made where the relevant creator can establish a legal ownership right, such as via copyright or a trade mark law. None of the major social media platforms impose rules on the ways in which hashtags can to be used, other than limitations on some platforms on the number of hashtags that can be used in each post. Given that neither the social media platform nor the author of the hashtag may be able to claim legal ownership of the hashtag, the result is a Wild West scenario where brands can create their own hashtags, co-opt already popular hashtags or seek to undermine competitor hashtags, seemingly all within the rules of the platform.

This lack of clarity in the social media platform terms of use does not mean brands should be too gung-ho about attempting to hijack or dilute a competitor’s hashtag. Risks may still arise out of this conduct, including the potential for trade mark infringement or misleading or deceptive conduct, which in turn may place the brand seeking to undermine a competitor in breach of the platform’s terms of use.

On Instagram, for example, all users warrant that posting content to the platform does not violate the rights of any person, including any intellectual property rights. If a brand is able to assert a legal ownership right over a particular hashtag, such as by way of trade mark registration, it is arguable that a competitor who uses that hashtag to seek to undermine the competition may find themselves in breach of Instagram’s terms of use and the subject of a complaint (not to mention possible legal action for trade mark infringement).

Similarly, as part of Instagram’s Terms of Use, users agree that they must not, in using Instagram, violate any laws in their jurisdiction (including but not limited to copyright laws). In Australia, the Australian Consumer Law prohibits misleading and deceptive conduct and false or misleading representations in trade or commerce. So what happens, for example, where a brand uses a unique hashtag that is specifically associated with another brand or with a particular event, such as #stateoforigin for the State of Origin series? Is that brand falsely implying that it is associated with or sponsoring that event? What if they make numerous posts that all include the same hashtag? As always, the content of the specific post or posts will be the key to answering the question and determining whether a reasonable member of the target audience would understand that the content implied such an association. Brands engaging in such conduct therefore need to be aware that they may well find themselves on the end of a consumer law action and a complaint for breaching the relevant social media platform’s governing rules.

So what about copyright?

So how can a brand establish an ownership right in a hashtag? Is it even possible?

There has been some speculation as to whether hashtags may be protected under copyright law. In Australia, copyright protection extends automatically to literary, dramatic, musical and artistic works. However, like advertising slogans (State of Victoria v Pacific Technologies (Australia) Pty Ltd (No 2) [2009] FCA 737) and headlines (Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984), in most cases hashtags are likely to be too short and insubstantial to constitute original ‘literary works’ and therefore are unlikely to attract copyright protection.

While the question of hashtags is yet to be directly considered by the courts, the courts have considered the question of copyright in advertising slogans. Like slogans, marketing hashtags are generally short and snappy, designed to be memorable. In Sullivan v FNH Investments Pty Ltd t/as Palm Bay Hideaway [2003] FCA 323, the court considered the advertising slogans “Somewhere in the Whitsundays” and “the Resort that Offers Precious Little”, finding that the slogans did not demonstrate the requisite degree of judgement, effort and skill to be original literary works in which copyright might subsist. Similar decisions in Australia and abroad reinforce the view that copyright is unlikely to be established in hashtags in the majority of cases.

In the absence of copyright protection, the answer for brands looking to protect their hashtags is much more likely to be found in the law of trade marks.

How to trade mark a #hashtag

In the United States, it is already well established that hashtags are registrable as trade marks where they function as an identifier of the source of the applicant’s goods or services. A similar conclusion is likely in Australia. In fact, a brief review of the trade marks register shows that some brands have already registered trade marks incorporating the word “hashtag”, for example “Hashtag Yolo”, which is registered in relation to energy control devices.

The trend of seeking trade mark protection for hashtags is likely to increase as brands settle upon and build value in hashtags as part of their overall branding.

Section 17 of the Trade Marks Act 1995 defines a trade mark as follows:

“A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”

There is no doubt that a hashtag, being the # mark followed by a word or words, is capable of falling within this definition. The question in most cases will therefore become whether the particular hashtag is capable of distinguishing the applicant’s goods or services from those of other traders.

As with any other trade mark, where a trade mark consists of the # symbol followed by descriptive or non-distinctive elements, it will likely not be registrable. For example, #SYDNEY would be rejected as Sydney is a well-known location and should be available for other traders to use to indicate the origin of their goods or services. IP Australia has indicated that other examples such as #PLAYNETBALL for sporting services or #FINDADATE for dating services would run into similar issues. Guidance from IP Australia suggests that, in most cases, the distinguishing element of the trade mark will not be the inclusion of the # symbol, but the words that follow it. Simply placing a # symbol in front of ordinary generic or descriptive words is unlikely to allow you to register them as a trade mark because other trader’s will still need to use those words in the course of business.

However, in some cases it may be arguable that the hashtag itself is an essential part of the company’s branding, especially where the brand has already used the hashtag to such an extent in the market that it has acquired a reputation in the hashtag, with a high degree of consumer recognition. Again, the courts are yet to consider the question directly, but a parallel can be drawn with domain name trade marks, which have been the subject of judicial consideration.

Many brands choose to trade mark their domain name where it forms an essential part of their branding. However, the top level domain (e.g. .com or .com.au) will not normally be the distinctive feature of the trade mark. The website name itself (e.g. ‘Google’ in google.com) must generally be capable of distinguishing the goods or services in order for a trade mark to be registered. In REA Group Ltd v Real Estate 1 Ltd [2013] FCA 5593, however, the Court found that top level domains could be essential elements of a brand. In that case, the Court held that Real Estate 1 had infringed realestate.com.au’s registered composite “realestate.com.au” trade mark on the basis of evidence of widespread consumer recognition of the mark. This evidence supported the proposition that the essential or distinguishing feature of the “realestate.com.au” logo was the domain name in its entirety, rather than simply the words “realestate”. The inclusion of .com.au as part of that essential feature was necessary because “realestate” on its own would not be sufficiently distinctive to establish brand identity, being a term commonly required in the industry. The Court found that the use of “realestate1.com.au” as part of an internet address on a search results page was deceptively similar to the registered “realestate.com.au” trade marks and therefore infringed those trade marks. A similar conclusion may be reached in respect of hashtags, where the hashtag itself becomes an essential feature of the brand recognised in the market, however, this remains to be seen.

Infringing a protected #hashtag

Of course, registering a hashtag trade mark does not necessarily mean that brands will be able to prevent anyone from using their trade mark on social media. To establish infringement, brands would need to show that the competitor had used as a trade mark a substantially identical or deceptively similar sign in relation to the same or closely related goods or services or in relation to unrelated goods or services where the registered trade mark is well known.

One of the key issues likely to arise is whether using a hashtag on social media is use as a trade mark, as a badge of origin to distinguish the brand’s goods or services.

Imagine that a brand had registered as a trade mark a popular hashtag such as #lol in relation to certain goods, say clothing. If another clothing brand were to post on their Twitter account a humorous tweet of a celebrity’s wardrobe malfunction with the #lol included, would that constitute an infringement? In many cases, the answer is likely to be no, because the alleged ‘infringing’ use would merely be use of the hashtag in its ordinary sense, in this case to indicate that the subject matter of the tweet is funny, rather than as a badge of origin (i.e. use as a trade mark). As with potential claims for misleading and deceptive conduct, the answer will usually lie in the content and context of each post.

The courts have considered a similar issue in the context of search engine results and advertising keywords. In Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75, the court considered whether a composite trade mark featuring the words “LIFT SHOP” was infringed by use of the same words in the title of a webpage, as shown by search results. Lift Shop – the owner of the trade mark – alleged that using the keywords in this way amounted to trade mark infringement. But the court decided that use of the words as keywords “lift shop” was descriptive for the purpose of taking advantage of the operation of search engines, the words being descriptive in the business of selling lifts. Similar conclusions may be reached where brands seek to enforce trade marks over descriptive hashtags. Other brands using the hashtag descriptively for the purposes of taking advantage of a social media platform’s indexing system would be unlikely to constitute use “as a trade mark”. On the other hand, use of a highly distinctive hashtag trade mark may still raise questions of infringement.

Protect your #brand

The law is still catching up with the hashtag phenomenon and it is clear that achieving legal protection for the use of hashtags on social media may require a creative approach.

The primary function of hashtags is to act as an indexing system on social media, which means that, at present, there is no way for brands to filter ‘approved’ brand content (e.g. authorised KFC content featuring the #KFC) from the thousands of unauthorised posts that may include the same hashtag. However, as hashtags become more important in the development and execution of advertising campaigns, more brands are expected to consider their options when it comes to protecting and using these potentially valuable assets. Especially where brands develop a distinctive hashtag to be used as a badge of origin, an application to register the hashtag as a trade mark should be considered.

At the same time, brands and their agencies using social media need to carefully consider whether or not they might be infringing someone else’s intellectual property, or running the risk of consumer law infringement or breaching social media platform terms of use, when they create new hashtags and use existing ones, especially when referring to another brand’s assets or where there is potential for consumers to be misled. In any event, the growing importance of hashtags in social media marketing is likely to lead to some interesting battles over the use of these key brand assets (#itson!).

“When my customer smiles at me…I go to Rio”: Ambush Marketing and the Rio Olympics

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As Brazil prepares to host the 2016 Olympic and Paralympic Games in Rio de Janiero, the Brazilian Congress has been busy attempting to protect the valuable intellectual property surrounding the Rio Olympics by enacting specific legislation in an effort to curb ambush marketing attempts, and unlawful associations by brands, which inevitably occurs during large scale sporting events.Brazil_and_australia

As is our usual advice around this time, agencies and brands need to consider the legal risks of associating a brand with the Olympics where the brand is not an official sponsor or licensee, particularly given the level of investment by official Olympic sponsors to gain an exclusive category right of association with the Games. Using the Olympic brand is not only regulated by the usual legal protections such as the Australian Consumer Law, copyright, and trade mark law, but also by legislation specific to the Olympics generally, all of which needs to be considered if any degree of unofficial association is to be made.

1.       Specific Brazilian Olympics Legislation

Soon after Rio de Janiero was chosen to host the 2016 Games, Brazil enacted special legislation to protect additional symbols and expressions specific to the Rio Olympics in The Olympic Act (Law 12,035/09 of October 1, 2009). Under this legislation, Brazilian authorities are responsible for monitoring, investigating, and suppressing any unlawful acts that violate the rights in the Olympic symbols, which are defined as:

  1. all graphically distinctive signs, flags, mottos, emblems, and anthems used by the International Olympic Committee;
  2. the names “Olympic Games,” “Paralympic Games,” “Rio 2016 Olympic Games,” “Rio 2016 Paralympic Games,” “XXXI Olympic Games,” “Rio 2016,” “Rio Olympics,” “Rio 2016 Olympics,” “Rio Paralympics,” “Rio 2016 Paralympics” and other abbreviations and variations, and also those equally relevant that may be created for the same purposes, in any language, including those in connection with websites;
  3. the name, emblem, flag, anthem, motto, and trademarks and other symbols of the Rio 2016 Organizing Committee; and
  4. the mascots, trademarks, torches and other symbols in connection with the XXXI Olympic Games, Rio 2016 Olympic Games, and Rio 2016 Paralympic Games.

The legislation makes it clear that an unlawful act may include use of the above symbols even if the use is not for a commercial purpose. Furthermore, the legislation seeks to expressly curtail ambush marketing practices by prohibiting the use of expressions and symbols which are ‘sufficiently similar’ to the symbols listed above, to the extent that the sufficiently similar symbol is “able to invoke an undue association of any products and services whatsoever, or even any company, transaction or event with the Rio 2016 Games and Olympic Movement”.

It is unlikely that this Brazilian legislation will have an extraterritorial effect in Australia and therefore would not influence or restrict local Australian marketing campaigns.  However, following the Australian High Court’s decision in Dow Jones & Company Inc v Gutnick [2002] HCA 56, infringing materials conducted via the Internet or other digital technology have the possibility of attracting “global liability” whereby advertisers and brands may be subject to the laws of Australia, even if the infringing material is uploaded overseas. It is possible that the courts of Brazil would take a similar approach, given the global nature of the internet. Therefore, if an online or social media campaign is uploaded to the Internet by an Australian brand, and is able to be viewed or downloaded in Brazil, there is the possibility that legitimate rights holders may be able to take action in Brazil against an Australian campaign which allegedly infringes the Brazilian legislation, regardless of the fact that the campaign is not being conducted from Brazil or targeted at Brazilian nationals.

The mere fact that individuals in Brazil can view the material may be sufficient. Of course, the Brazilian authorities would need to attempt to enforce any judgment in Australia, which raises complex questions under International law and treaties, which is beyond the scope of this article. However, the risks remains.

Australian Position

In Australia, the Olympic Insignia Protection Act 1987 (Cth) regulates the commercial use of certain Olympic expressions. Any advertising or promotional campaigns where the brand featured is not a licensed user must steer clear of words such as “Olympics”, “Olympic Games”, and “Olympiads” (or any words closely resembling these) in order to avoid infringing the legislation. The Olympic motto “Faster, Higher, Stronger” and its five ring symbol are also protected under this act.

In addition, the Major Sporting Events (Indicia and Images) Protection Act 2015 (Cth) offers specific protection to the organisers and sponsors of major Australian Pacific sporting events, including the Asian Football Confederation (AFC) Asian Cup 2015, the International Cricket Council (ICC) Cricket World Cup 2015, and the Gold Coast 2018 Commonwealth Games. Whilst the explanatory memorandum of the Bill indicated that there was potential for the scope of the Bill to be widened to account for future major events, at this time, this act does not provide specific protections in relation to the Rio Olympics in an Australian context. As indicated below, there are still existing protections in Australian law which protect the commercial rights of Olympic organisers and official sponsors.

2.       Australian Consumer Law – misleading or deceptive conduct

Even if you do not use any Olympic and specific Rio Olympics insignia and symbols, the Australian Consumer Law prohibits the making of false representations of association, affiliation, endorsement, sponsorship or a similar relationship with the Rio Olympics where in fact no such relationship exists.

Pursuant to the Australian Consumer Law (embodied in Schedule 2 of the Competition and Consumer Act 2010 (Cth), any marketing activity that falsely or misleadingly suggests, or implies an association, sponsorship, or affiliation between a brand and an event may constitute misleading or deceptive conduct (section 18) and/or contain false or misleading representations (section 29).

However, the distinction must be made between, on the one hand, a marketing activity that indirectly implies an affiliation with an event, which may only lead a consumer to wonder about the association, or call to mind the Olympics and related sports generally, which may not give rise to a cause of action under the Australian Consumer Law, and on the other hand, a marketing activity that makes direct and misleading claims of association with an event, leading a consumer into error which may result in deception or a misrepresentation under the Australian Consumer Law.

Additionally, ambush marketing may be actionable under the common law action of passing off if it causes damage to the reputation or goodwill of an official sponsor or supplier to an event, or wrongful appropriation in the sense of causing potential customers to associate the product or business of an official sponsor or supplier with that of the marketed brand where no such connection exists.

For example, during the 2012 London Olympics, a TVC for Australian Mining featuring Olympic cyclist Anna Meares was pulled after the Australian Olympic Committee claimed it was in breach of advertising guidelines aimed at protecting official sponsors. The TVC showed Meares in cycling gear sporting sponsor BHP Billiton’s logo (who were a rival to official Australian team sponsor Rio Tinto) while she spoke about her Olympic hopes in London.

Generally speaking, if an advertisement for running shoes was created which was accompanied by the caption “Helping Athletes Win”, this would most likely not be considered sufficient to suggest an association with the Games in breach of the law. However, a promotional product bearing the colours of the Olympic rings as well as athletic imagery arguably raises consumer law concerns.

3.       Copyright and Trade Mark Infringement

The logos, fonts, and imagery utilised by the Rio Olympics are protected by a combination of copyright and trade mark registrations in addition to the legislation enacted in Brazil mentioned above. Reproducing a trade mark or logo, or adopting the official font in marketing material will likely amount to an infringement of these legal areas, and any use of the Olympic brand assets should be strictly avoided unless permission (likely by way of a license) has been obtained for the specific intended use.

Recommendations

Whilst Olympic fever is contagious, the side effects of unauthorised association are legally risky and potentially costly for both agencies and brands. Agencies should be prudent and cautious when deciding whether to conduct an Olympic-themed or associated campaign, and should avoid any use of the Olympic names and its highly valuable brand assets. It is important not to rely on the assumption that any use will go unnoticed, as the Olympic Committee and official sponsors keep a watchful eye on those seeking to ambush their event and to protect the investment.

It is useful to note that if an agency and brand are attempting to associate with the spirit of the Olympics whilst not crossing the legal line, each particular communication must be considered on its own merits having regard to the dominant impression of the communication or advertisement, the context, and the media on which it will be promoted or advertised, as this will have an effect on the legal outcome.

We recommend that any marketing campaigns that could involve any Olympic association, particularly ones which ‘sail close to the wind’ be subject to legal clearance.

The risks of using ‘Anzac’ in Advertising

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The Anzac legend is central to Australian culture and, with this year marking the Anzac Centenary,  it is not surprising that some brands have attempted to align themselves with our national heritage. But brands looking to associate themselves with the Anzac legend and Anzac Day not only run the risk of experiencing consumer backlash, but also falling foul of regulations designed to protect the use of the word Anzac.

Source: ABC News

Source: ABC News

In a high profile example, supermarket giant Woolworths was last week forced to pull a controversial advertising campaign after consumers expressed their outrage at the supermarket giant, which was perceived to be exploiting the Anzac Centenary. The ‘Fresh in our Memories’ campaign centred on a website that encouraged Australians to share memories of war veterans, by changing their profile picture on social media. The website included a picture generator, where users could upload their own images of people ‘affected or lost to war.’ The image was then branded with the Woolworth’s logo and slogan ‘FRESH IN OUR MEMORIES’ – which many saw as a reference to Woolworths’ brand image as ‘The Fresh Food People. ’ Consumers took to social media to show their dissatisfaction, with many hijacking the picture and creating hashtags such as #brandzacday.

Of course, brands attempting to profit from the Anzac legend is not a new phenomenon and Woolworths is certainly not the first company to come under fire. Earlier this week, retailer Target had to pull ‘Camp Gallipoli’ branded merchandise from its shelves after the Department of Veteran’s Affairs said that the products were ‘inappropriate’ because the primarily featured the word ‘Anzac’ and had minimal reference to ‘Camp Gallipoli.’

What many brands may not know is that the use of the word Anzac is protected under laws established almost 95 years ago, only six years after the landing at Gallipoli. Regulations under the Protection of Word ‘Anzac’ Act 1920 (Cth) (The Act), prohibits people or organisations from using the word ‘Anzac’ in connection with ‘any trade, business, calling or profession or in connection with any entertainment’ without the authority of the Minister for Veterans’ Affairs. Financial penalties of up to $10,000 for a natural person and up to $51,000 for a company may apply for breaches.

As well as the risk of a consumer outcry, the law in Australia is protective of the use of the word Anzac and, as examples in the lead up to the Anzac Centenary have shown, brands need to be aware of this. As always, if in doubt about your advertising or marketing campaigns, we recommend seeking legal advice.

Social media hangout with Stephen and Jules Lund

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Yesterday, Stephen participated in a social media and the law hangout with radio personality, Jules Lund. In front of a live audience at Mumbrella House, they both discussed social media issues, particularly brands or companies using social influencers and how the law is catching up.

You can read Stephen’s article about social influencers here or you can watch a video of the hangout below!

Boobs, swearing and erectile dysfunction: responding to advertising complaints

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Responding to complaints about ads is part and parcel of the job for creative agencies and brands. The fact is, some of the best advertising pushes the boundaries of what is socially acceptable. Creating ads that challenge, confront or shock audiences has proven to be an effective way for many companies to get their message across.

And, of course, some ads are just plain offensive or inappropriate.

But what happens when somebody complains? In 2014, the Advertising Standards Board received a record number of consumer complaints – approximately 5,600 – about advertising. The usual suspects – boobs, swearing and erectile dysfunction – were all in there, along with a number of ads that received complaints because of their high ‘ick’ factor including scenes such as nose picking and farting. First place in the list of most complained about ads in 2014 was for an ad encouraging married people to have an affair, although the Board found the advertiser hadn’t cheated and the complaints were dismissed.

While consumer complaints can be a headache for agencies and brands, they are an important part of advertising self-regulation in Australia. Agencies therefore need to be aware of their obligations and should know how to respond to complaints when they arise.

Background

The Advertising Standards Board (ASB), part of the Advertising Standards Bureau, is the body responsible for handling consumer complaints about advertising in Australia. The Board is made up of 20 people, chosen to be reflective of Australian society and makes its determinations under the various industry codes prescribed by the Australian Association of National Advertisers (AANA), such as the AANA Code of Ethics, the AANA Code for Marketing & Advertising Communications to Children and the AANA Food & Beverages Advertising & Marketing Communications Code.

As a rule of thumb, about 85% of consumer complaints to the Advertising Standards Board tend to be dismissed. The top 10 most complained about ads in 2014 were all found to be compliant. But that doesn’t mean that brands and their agencies shouldn’t take their responses seriously. The consequences for having a complaint upheld can include a direction to modify or remove the ad, which can undermine campaigns and may involve significant costs to the agency and client.

The AANA Code of Ethics

The object of the AANA Code of Ethics is to ensure that advertising and other forms of marketing communications are legal, decent, honest and truthful.  The Code is divided into three parts:

  1. Competitor Complaints;
  2. Consumer Complaints; and
  3. Other Codes.

When the ASB considers consumer complaints, it assesses the impugned advertisement against the requirements of Section 2 of the Code, which sets out rules about discrimination and vilification; the use of sex appeal in a way that is exploitative or degrading; violence; sex, sexuality and nudity; strong and obscene language; and health and safety.

The ASB does not consider complaints that fall outside the scope of the Code, which is why ads with a high ‘ick-factor’ or ads in ‘poor taste’ but that otherwise comply will not be found to be in breach.

A ‘prevailing community standards’ test also applies to all parts of Section 2, which effectively means that the ASB will have regard to what it considers to be prevailing community standards at the time the advertising/marketing material was published. Accordingly, this is a shifting gauge – something that might not have been in accordance with community standards in the past (such as an advertisement of a woman in a bikini) might be perfectly acceptable today.

What to do if you receive an advertising complaint?

In many cases an advertiser is not likely to know that someone has complained about their ad until they receive a letter from the Case Managers at the Advertising Standards Bureau.

This letter will provide a copy of the complaint(s) and identify what section of the Code is likely to apply. For example, if the complaint is about violence, the letter will identify that the most likely section of the Code to apply will be Section 2.3. It will also provide a list of information the ASB requires the advertiser to provide along with its response, such as the CAD reference number (if applicable) for the advertisement, a copy of the script etc.

Firstly, the most important thing is not to ignore the letter. Deadlines are tight and responses are usually required within seven days. In our experience, it is helpful to consider the following points when responding:

  • What is the background? Where did the advertisement run and who was likely to see it? This can be particularly important if complaints relate to children.
  • What is the nature of the product? Do any specific codes or regulations apply? This can be relevant, for example, for food or beverage product or an alcohol product.
  • Does the advertisement have a CAD rating and, if so, was it screened during appropriate timeslots? This can help to establish whether the advertisement was appropriate to the relevant audience.
  • Did you seek any legal or other advice about the advertisement? If so, what did it say?
  • Did the advertiser receive any other complaints? While one complaint is enough to have an ad removed, if the ad is otherwise well received it may indicate that the complaint is not reasonable having regard to prevailing community standards.
  • What does the relevant section of the Code say? The response should address each part of the relevant section of the Code to outline why the advertisement is not in breach. If the advertisement may also breach another section of the code that not listed in the ASB’s letter to the advertiser), this should also be considered and addressed.
  • Reviewing previous ASB determinations.
  • What is the tone of your response? Some advertisers tend to adopt an aggressive approach – one advertiser recently labelled complainants “oxygen thieves” – but in our experience this usually isn’t the best method.

There is no need for response to be lengthy, as long as it addresses all of the points raised in the ASB’s letter to the advertiser and explains the advertiser’s position.

And, of course, if you are in doubt, seek professional assistance. We have significant experience responding to ASB complaints on behalf of advertisers and agencies and are able to provide advice and draft responses at short notice.

Working with social influencers: compliance tips for brands

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It is evident from a casual gaze through social pages or comms industry commentary that brands are turning to ‘social influencers’ to promote their products through online social channels, with the intent of influencing consumer purchasing decisions in favour of their products.

Source: Mumbrella

Source: Mumbrella

Brands and their agencies are identifying and building commercial relationships with individuals, events or groups such as journalists, bloggers, instagrammers, consultants, or industry analysts (directly or via influencer networks) to leverage them and build brand credibility within their identified following or ‘tribe’. This has sometimes been referred to as the Oprah Winfrey effect.

The product is sometimes overtly or subtly promoted by the influencer and the influencer does not always disclose that they have been rewarded. This gives rise to an important consumer law question – do social influencers need to disclose rewards and commercial connections with brands and products?

The question is important because consumers trust what is said online and a breach of that trust may result in a breach of the law. According to Nielsen Global Online Consumer Survey more than two thirds of consumers say they trust opinions stated online – second in trustworthiness only to recommendations from people they know in real life.

For example, in January 2015 Australia Post came under fire after being caught out by consumers over its use of social media influencers, when it emerged it was paying instagrammers without disclosing that their endorsements were being paid for.

Social influencers take many different forms, including:

  • Celebrities and personalities with a significant social presence and ‘tribe’ of followers
  • Brand ambassadors
  • Events / activities / sports (eg V8 Supercars)
  • Bloggers and instagrammers
  • Journalists (native advertising)
  • Individuals that have received social notoriety purely from their social activities (eg You Tube videos)
  • Product review sites – (eg App Store etc)

The Australian Competition & Consumer Commission (ACCC) is the Federal Government regulator looking after the interests of consumers and competition in the Australian market place. They administer the Competition & Consumer Act 2010 and this act contains the Australian Consumer Law (ACL) which applies to the commercial practices of any person, company or business in Australia.

The ACL prohibits misleading or deceptive conduct and specific product misrepresentations, including testimonials (Section 18 and 29). This is the only generally applicable law at this time that would require social influencers to disclose rewards and commercial connections for posts. A brand or business would only need to do so if, in the circumstances, it would be misleading or deceptive or a misrepresentation NOT to disclose rewards and commercial connections for posts.

What this means legally is difficult to answer and must be assessed on a case by case basis having regard to the nature of the communication, the context, the likely audience of the post and the consumer ‘take out’.

The uncertainty in Australia is compounded due to a lack of judicial decision – we are still waiting for the “big” court decision around the requirements of social influencers and their paid for posts, although we can obtain some guidance from a case involving celebrity testimonials: ACCC v Advanced Medical Institute Pty Ltd (the Turpie Case), in relation to advertising and promotion by Advanced Medical Institute Pty Ltd (AMI) of a nasal spray form of treatment for erectile dysfunction. The Federal Court of Australia declared that AMI engaged in conduct that was misleading or deceptive in breach of section 52 of the Trade Practices Act 1974 (now section 18 of the ACL) by causing advertisements to be published in major newspapers featuring the celebrity Ian Turpie and containing false representations including:

  • That Mr Turpie had undertaken an interview during which he disclosed, in the presence of his wife, that he was losing his sexual potency, and
  • That AMI nasal delivery system had cured or alleviated Mr Turpie of the effects of impotence or erectile dysfunction.

The court also declared that the advertising agent for AMI, by preparing and causing the advertisements to be published, was knowingly concerned in, or party to, the breach of section 52 of the Act. This makes it clear that both the advertising agency and the celebrity concerned can be held liable for misleading conduct.

Another recent case of some relevance to the question of liability is ACCC v Allergy Pathway Pty Ltd, where the Federal Court found the defendant company liable for false customer testimonials posted on the wall of its Facebook and Twitter pages, when it knew the testimonials were false and took no steps to remove them.

An example involving Twitter occurred in April 2012, with the SA Tourism Commission Kangaroo Island ‘Cash for Tweets’ controversy when they came under fire from Media Watch for paying celebrities to tweet positive messages about Kangaroo Island without disclosing that the celebrities were paid to post.

The ACCC is presently watching social influencers and has issued some guidance for online reviews. From our reviews of the ACCC’s commentary, press releases and comments to journalists we can state with confidence that the ACCC is of the view that the use of endorsements on social media can breach the ACL when the influencer has received payments for the post or comment that is not disclosed. For instance:

“There is nothing illegal about paying someone to do an endorsement, but is a third party aware of the commercial relationship? What we ultimately say to businesses and bloggers is that you are on good safe ground if you disclose commercial relationships. When you’re not then you start running into this grey area that could potentially lead you to a messy end.”  Michael Schaper, ACCC Deputy Chair, January 2014.

Here are some compliance tips we recommend for brands and agencies entering into commercial relationships with social influencers and offering rewards for posts:

  • Enter into an appropriate Social Influencer Agreement with the influencer that addresses the legal issues (including those discussed in this article) and mitigates brand risk appropriately
  • The risk of ACL breach in our view increases if the comment or post is actually ‘scripted’ and clear disclosures about the rewards and commercial associations are not made
  • Posts and testimonials must reflect genuine views, opinions, experiences and should organically fit
  • For celebrity or other influencer to disclose rewards, incentives and commercial connections with a brand – case by case basis as to whether they need to disclose. Consider audience take out and if a well known brand ambassador already
  • If consumers think blogger is blogging without commercial influence, likely to be misleading or deceptive
  • Blogger should disclose commercial connection in a prominent way
  • Blogger should be told incentive is available regardless of what is stated – positive or negative
  • Paid for and fake positive consumer reviews on review sites likely to be misleading or deceptive
  • Brands writing of ‘own’ reviews to look like genuine consumers – eg fake testimonials on You Tube, own websites, Facebook page etc likely to be misleading or deceptive
  • Brands writing negative reviews to damage reputation of competitors likely to be misleading or deceptive

The use of social influencers by brands and their agencies is growing in popularity but it is important that their influence is used in such a way so as to enhance the brand and its products and not result in negative commentary and legal liability. As the legal implications of using a given influencer and releasing a particular post must usually be considered on a case by case basis, we strongly recommend that legal advice and clearance be obtained.

CommsCon 2014

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Firm principal Stephen von Muenster recently attended Mumbrella’s CommsCon on 20 March 2014. He presented a question and answer session on ‘Managing Risk: How to keep your brand on the right side of the law.’

CommsCon

During this session, Stephen was asked questions relating to a number of legal areas. Below are some key take outs from the session.

Copyright:

I run a small PR agency. When I help a client get great publicity in the newspapers, I sometimes scan in the clippings and put them on our website, and also send them a copy. I’ve heard I could get into trouble for this. What should I do?

• Copyright protection automatic and applies to editorial works if there is a reproduction of a substantial or important part of an original work

• No copyright in linking to the article; no copyright in simply the headline of the article

• For reproduction in full, including on the Internet, get a licence from Copyright Agency Limited (CAL) for the use as this is a collecting society that manages a number of publishers’ interests

Libel:

We look after a client’s Facebook page. Sometimes the public say some pretty offensive things in the comment thread about the brand, or other people. If it’s libellous are we liable?

• Under Defamation Acts (2006) defamation can occur where one person publishes content [words, sound, video, images] that damages reputation of another identifiable person

• Liability for defamatory publication can extend to a brand where the brand is able to exercise control over a publication, there is knowledge of the publication and there is a failure to prevent or remove the publication by a third party, eg on a brands blog or Facebook page etc

• Have clearly stated community guidelines and netiquette outlawing personal attacks, vilification and defamation. Such comments would also be a breach of Facebook’s Rights & Responsibilities

• Actively moderate or review blog postings / comments and remove those that breach community guidelines or rules of social media site – do not rely on users to tell you

• Remember the case of Federal Court decision in Seafolly Pty Ltd v Madden highlights social media legal media risks in the areas discussed above, including:
o Misleading & deceptive conduct
o Injurious falsehood
o Copyright infringement
o Defamation

Privacy:

I help run the social media community for several of our clients. Are there any implications of the changes to the privacy laws in how I share any information we gather?

• You need an up to date privacy policy

• You need a compliant collection statement at the point you collect personal information

• All direct marketing via ANY channel (including banners and social) that uses personal information needs to comply with APP 7 (direct marketing)

• Direct marketing can be via any channel including:
o Telephone
o SMS
o Mail
o Email – eg using personal information provided by customer in the course of signing up for a loyalty program
o Online advertising – including targeted advertising when browsing
o Social advertising – eg facbook user ID’s, displaying an ad on social media to an individual using personal information (including data collected by cookies dropped as a result of the individuals site visits)

Non-competes

I’m about to change agencies. I’ve got a great relationship with a couple of clients, and I think I can persuade them to come across. I also happen to know that the contract is up soon. Are there any risks in getting involved in bringing them in?

• Comes down to your contract

• Usually we see non-competes and non-solicits

• Non compete means you cannot work for a competitive business but these are difficult to enforce against employees who need to earn a living in their chosen profession – unreasonable restraining

• More enforceable if can be proven are the non-solicits of clients of the former agency or employees of the former agency

• Also need to consider confidential information and IP issues that arise in employment contracts

Non-competes

I’m tired of training up staff, then just as they are becoming useful they get poached for more money and move to a rival. Is there anything I can do to stop them from working somewhere else?

• Pay them more money

• Bonus incentives tied to loyalty and staged payments

• Enforce non-solicits if applicable

Intellectual property:

I’ve had a great business idea. But I did some of the work on it during my lunchbreaks. If I go out on my own can my employer claim they own the idea?

• Need to check your employment contract to see if there is anything said as to what is “during the course of employment”. It may cover lunchbreaks particularly if you are using company assets eg computers, resources etc to develop your idea.

• Need to consider if the ‘idea’ is IP – if it is something protected by copyright and it is in the course of employment then agency will own the IP

• If it is an idea only it may be protected by employment contract and the common law obligations of confidence that an employee has to his or her employee

• Best to come up with your ideas at home out of work duty hours and only tell your employer of your idea if you agree with them up front that you own it at this stage

Debt collection

A relationship with a client ended badly. They haven’t paid their bills for the last three months, claiming they got no results. They had unrealistic expectations. They owe us about $20k. Should I sue?

• Depends on the circumstances of course. There may be legitimate dispute here.

• If they never raised any concerns prior and now conveniently, after the relationship ends and you have issued final bills, they say they did not get what they paid for, they may find it hard to defend.

• Statutory demand is a possibility

• Always get legal advice

We are always happy to answer your questions. Please contact us on (02) 8221 0933 or via info@vmsolicitors.com.au if you have any further queries.

Online Reviews: Do Not Fake it Until You Make it

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It’s Saturday night and you’re looking to try a new local restaurant, but which one? Smartphone in hand, you jump onto Yelp to assess the nearby options. You follow your app’s suggestion and try that new Japanese place with rave reviews.

A few weeks later you’re dreaming of a weekend escape, but where to stay? A quick visit to TripAdvisor and you know the top 10 accommodation options at your destination. You know which hotel has the plushest pillows and which serves the crispiest bacon at the breakfast buffet. You make your decision accordingly (you choose the bacon, obviously).

Image: Phil Campbell

Online consumer reviews have changed the way in which consumers make purchasing decisions. We increasingly rely on these review platforms to inform our buying habits. A recent Sensis Social Media Report 2013 suggests that 74% of social media users read online reviews before making a purchase. For this reason, the ACCC has placed a focus on maintaining the integrity of reviews and review platforms. In December, the ACCC released a set of best practice guidelines entitled ‘What You Need to Know About: Online Reviews – a guide for business and review platforms’.

The guidelines set out three guiding principles:

  1. Be transparent about commercial relationships
  2. Do not post or publish misleading reviews
  3. The omission or editing of reviews may be misleading

The publication also provides more specific guidance for businesses and review platforms to follow, so that they can avoid engaging in misleading and deceptive conduct.

Review Platforms should:

  • disclose any commercial relationships between the review platform and reviewed businesses;
  • remove reviews known to be fake;
  • disclose any incentive which the platform offers in exchange for a review;
  • remove offensive, defamatory or irrelevant reviews;
  • refrain from selectively removing or editing negative reviews because of a commercial relationship with a reviewed business; and
  • provide reviewed businesses with an opportunity to post a public response to negative reviews.

Reviewed Businesses should:

  • refrain from soliciting others to write reviews about their business or a competitor’s business if they have not experienced the goods or services;
  • refrain from using platforms as a forum for personal reprisals against staff or business owners; and
  • follow the guidelines and exercise caution when offering incentives in exchange for reviews.

Under the Competition and Consumer Act 2010 (Cth), organisations face penalties of up to $1.1 million if they are seen to be engaging in misleading or deceptive conduct, and the ACCC is serious about targeting fake or misleading reviews. Most recently, in January this year, the Federal Court ordered that P & N Pty Ltd and P & N NSW Pty Ltd (trading as Euro Solar) and Worldwide Energy and Manufacturing Pty Ltd (WEMA, formerly trading as Australian Solar Panel) pay combined penalties of $125,000 for publishing fake testimonials and making false or misleading representations about the country of origin of the solar panels they supply.

The ACCC guidelines are available here.

A Whopper of a Trade Mark Dispute

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A meaty dispute recently arose between a small hamburger shop and fast food giant Hungry Jacks. The take-away shop, in Wamberal on the Central Coast of NSW, has been serving the ‘Wambie Whopper’ for 20 years. It was reported that Hungry Jacks wrote to the owners, requesting that they stop using ‘whopper’ in their shop name.

Image: chichacha

When news of the letter broke on Facebook, Hungry Jacks was grilled on social media, with fans of the burger rallying to support the shop. Long-time Wambie Whoppers customer Matt Burke mustard huge support via Facebook by setting up the page ‘Save the Wambie Whopper’. The page received over 29,000 ‘likes’. A petition on change.org received over 5,000 signatures and Hungry Jacks’ own social media accounts were inundated with comments and criticisms.

Hungry Jacks found itself in quite a pickle, and following the backlash, the company withdrew its request.

The sauce of Hungry Jacks’ claim was likely based on trade mark and trade practices law. The word mark ‘Whopper’ was registered in December 1997 by the Burger King Corporation. However, if the term ‘Wambie Whopper’ was in use before the date of registration, the shop may have had a defense to any claim of trade mark infringement under the Trade Marks Act. The owners of Wambie Whoppers could have even considered taking action against Hungry Jacks under section 129 of the Trade Marks Act on the basis that Hungry Jacks had no grounds for making the threat.

It is also unlikely that Hungry Jacks would have been able to successfully argue that use of ‘Wambie Whopper’ is misleading and deceptive under the Australian Consumer Law. Lettuce be honest, it seems highly improbable that a reasonable consumer would consider that an association or connection exists between Hungry Jacks and Wambie Whoppers.

From a PR perspective, it seems to us that Hungry Jacks flipped out unnecessarily, to the detriment of its brand and reputation. As corporate conglomerate Unileaver found out earlier this year when it issued a legal letter to popular gelato bar Gelato Messina, strictly enforcing legal rights is not always the best course of action to take.

Socially Awkward

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Poor Qantas. In recent times the airline has suffered many a social media mishap. Back in 2011 their Twitter hashtag #qantasluxury was hijacked by unhappy customers who delivered an unprecedented number of cuttingly sarcastic and highly critical responses. In 2012 the airline battled to remove a snarky parody PR account from Twitter. The most recent incident occurred in July this year when a hardcore pornographic image was displayed for about 7 hours on the Qantas Facebook page, much to the shock of an 8 year old boy and his father.

Image: Jason A. Howie

Of course Qantas is only one of many brands to suffer at the hands of social media. Australia’s Next Top Model recently had their promotional hashtag #antmselfie hijacked by feminist group Collective Shout, who claimed the competition was superficial and encouraged sexualised behaviour. The group’s actions drew attention to photo entries from girls as young as 9.

So what can you do to minimise the legal risks and avoid being featured in one of the many online articles gleefully titled ‘Companies that have made Huge Social Media Mistakes’?

Australian Law and Guidelines

In Australia, social media moderation is a hotly contested subject. The Australian Competition and Consumer Commission (ACCC) and a number of industry bodies have released somewhat conflicting guidelines, as summarised below.

ACCC

The ACCC has made it clear that it considers content on social media sites to be advertising and/or marketing communications. Importantly, this means that competition law applies to such content.

Accordingly, brands have a responsibility to ensure content on their social media pages is accurate, irrespective of who put the content there. Brands will be held responsible for user posts or public comments made on social media pages which are false, misleading or deceptive if the brand knows about them and decides not to remove them.

In regards to moderation generally, the ACCC says that the amount of time a company needs to spend monitoring its social media pages depends on the size of the company and the number of fans or followers they have.

Australian Association of National Advertisers (AANA)

The AANA has stated that its self-regulatory codes apply equally to digital and traditional media.

For brands that are interacting and participating actively on a digital platform, the AANA Best Practice Guideline ‘Responsible Marketing Communications in the Digital Space’ recommends brands moderate at least once every business day. Brands should also moderate immediately after posting or engaging online and for at least 2 hours following a post.

Interactive Advertising Bureau (IAB)

Unlike the ACCC and the AANA, the IAB believes that user comments directed towards a social media platform do not constitute advertising. However, user comments can be converted into promotional statements through an organisation’s direct endorsement or expression of agreement. Further, the risk of an organisation becoming responsible for a user comment on its social media platforms increases once it has been made aware of the comment and it has had the opportunity to review it and take appropriate action.

In its new publication ‘Best Practice for User Comment Moderation’, the IAB suggests that companies moderate comments to the extent their resources allow. At a minimum, this should involve reviewing and moderating recently published comments at the same time as posting a new comment. The IAB notes that brands should increase their moderation if they are engaging in online interaction that is provocative, and designed to illicit controversial responses.

So what should you do?

When it comes to social media moderation, a common sense approach is best. Brands should moderate their pages regularly, taking into account the extent and activeness of their social media presence. For large international companies such as Qantas, this may mean consistent monitoring 24 hours, 7 days a week. For smaller brands, this may be once a business day. All brands should remove posts that are, or are likely to be, false, misleading or deceptive, defamatory, offensive or which breach intellectual property laws as soon as the brand becomes aware of them.

Most importantly, all companies should have in place:

  • A social media policy, which sets out employer expectations around professional and private use of social media;
  • Community manager guidelines, which set out clear company policies and practices around moderation and the removal of offensive or illegal content;
  • House rules/community guidelines, which set out the standards expected from community users; and
  • A crisis management plan, in case something does go amiss.

Of course, in an ideal world you will never have to use that crisis management plan!