The Advertising Industry Tribunal has overturned the ruling by the Advertising Standards Authority (ASA) directorate that iTouch`s truetone advertisements are misleading to consumers.
"It cannot be said that the any of the advertisements by iTouch are likely to mislead the consumer into believing that the truetones being advertised are original sound clips of the original artists," the tribunal has ruled.
Last year, Sony BMG lodged a complaint that the prominent use of the name and image of an artist and the phrase 'truetone` leads consumers to believe they will receive a clip from the original recording of songs when downloading a ringtone, whereas they only receive an imitation.
The ASA directorate ruled that the advertisements were misleading and iTouch was required to withdraw the advertisements in their current format. However, iTouch appealed against the ruling in February, saying consumers downloading ringtones were aware of the terms used to designate types of ringtones.
The tribunal has now ruled that in spite of the prominent use of names and images of the artists in the advertisements, the average consumer of ringtones and related products would not be deceived into believing that he/she was downloading a sound clip of the original artist.
It also noted that should it be wrong in this assumption, disclaimers in the advertisements would clarify the issue. It said that contrary to Sony BMG`s position, the disclaimers were sufficiently legible.
The tribunal also notes that while Sony BMG may have shown that it has a contractual interest in the exclusive use of the names, images and recordings of various artists, it had not demonstrated it had any advertising goodwill in the names and images of the artists.
"At most, what may have been shown to us is that goodwill or reputation attached to the artists may be at stake," the tribunal says.
Covertones vs ringtones
Greg Brophy, MD of iTouch SA, says while his company has been vindicated, iTouch has nonetheless begun to use the term "covertones" for all ringtones based on imitation versions of songs.
This is despite the fact that both the terms "truetone" and "realtone" are used almost interchangeably by many content providers in European and local markets, and refer to both samples of originals and of covers, he says.
"We took the point of view that the mobile content industry in SA needs to be absolutely clear to its users, and make the terminology intuitive and obvious," Brophy says.
He notes: "Our clients downloaded some 250 000 truetones in December and January and we did not receive one complaint - so this tells us that the consumer is not confused."
Brophy says the whole issue is really based on the fact that Sony BMG in SA and iTouch have not reached an agreement on the sharing of revenue for songs sung by original artists for download to cellphones.
"Sony BMG wants 60% of the revenue generated from these downloads. This is impossible as it kills the product," he says.
Brophy also notes that iTouch is working to develop stronger licensing relationships with large international music labels in SA.
Brophy says he has contacted the Wireless Application Service Providers` Association and believes a plan will be put in place to standardise the terms.
Disturbed by ruling
Davin Mole, CEO of Exactmobile, says he is "very disturbed" by the ruling, saying the correct market understanding of the word truetone was not conveyed to the tribunal.
"We stared selling ringtones of the original artists 18 months before iTouch entered the market with their covertones. From the start, we called them truetones. About eight months after us, Vodacom started selling truetones using clips from the original artist on their portal Vodacom4me as did MTN on MTNLoaded," he says.
"Therefore by the time iTouch started selling covertones and called them truetones, there was already an understanding in the market that truetones were clips from the original artists.
Legal steps
Following the hearing, Sony BMG MD Keith Lister said the company would consider avenues to address the intellectual property issue and is taking legal advice.
Calling the use of names and images of artists to advertise truetones "intellectual property theft", he vowed to stop iTouch "no matter how long it takes or how much money it costs".
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Sony BMG declares war on ringtone 'theft`
}iTouch to appeal 'truetone` ruling
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