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Protect the Sports; Protect the Sponsors: Need for an Action against Ambush Marketing

Manish Tiwari and Radhika Bhargava deeply analyze the concept of ambush marketing in India and suggest that now it’s the time
Manish Tiwari and Radhika Bhargava deeply analyze the concept of ambush marketing in India and suggest that now it’s the time that India should enact a legislation in regard to ambush marketing which will expressly defines ambush marketing and prohibits ambush marketing in order to protect the intellectual property rights and interests of the sponsors.
Introduction
Recently Mahendra Singh Dhoni, Captain of the Indian cricket team was in highlights for reasons relating to ambush marketing clause given in ICC guidelines during the Cricket World Cup 2011. He was a brand ambassador of a product directly in competition with an official sponsor of the World Cup. As sport sponsorship has grown and developed in importance and sophistication over the past three decades, so too have the efforts made by un-associated brands to capitalize on the financial benefits and media value provided by sport. The need for marketers, sponsors, and officials to acknowledge, understand, and defend against ambushing has been magnified by the staggering growth of sponsorship investment over the past twenty-five years. Sandler and Shani (1989) define ambush marketing as "a planned effort by an organization to associate itself indirectly with an event in order to gain at least some of the recognition and benefits that are associated with being an official sponsor".

The goal of ambush marketers is to give consumers the impression that they are somehow connected to the event, without having to pay for the sponsorship. It is an attempt of the third party to associate with the event or its participants so as to deprive the ‘official sponsors’ of part of the commercial value due to their ‘official’ designation. Such an association is not in consent with the event organisers and the aim is to delude the consumers into believing that they are the official sponsors.

Strategies

There are three elements that help distinguish sponsorship from patronage: 1) A sponsor makes a contribution in cash or kind -- which may or may not include services and expertise -- to an activity which in some measure is a leisure pursuit, either sport or within the broad definition of the arts; 2) the sponsored activity does not form part of the main commercial function of the sponsoring body (otherwise it would be straightforward promotion, rather than sponsorship) and 3) the sponsor expects a return in terms of publicity. Ambush Marketing can be divided into three broad categories:

a)  Direct ambush marketing

b)  Associative ambush marketing

c)  Incidental ambush marketing

A. Direct ambush marketing is an intentional use of symbols and trademarks associated with the mass event so as to give the consumers the wrong impression as to the actual sponsors of the event. Certain direct ambush marketing strategies are:

  • Predatory ambushing: The direct ambushing of a market competitor, intentionally attacking a rival’s official sponsorship in an effort to gain market share, and to confuse consumers as to who is the official sponsor. For example, during the Heinekein, UEFA European championships, 2008, Heinekein in an effort to ambush Carlsberg’s official sponsorship, created marching band-style "Trom-pets" (drum hats) for Dutch fans on their way to Bern which also acted as drum, branded with the heinekein logo and name; company released advertisements featuring Dutch fans travelling to Switzerland, visiting official Oranje fans camping complex, and Heinekein marketing executives plotting ways to ambush the European Championship.

  • Coat tail ambushing: the attempt by an organisation to directly associate itself with a property through legitimate link, without securing official event sponsor status. It refers to the unsolicited association of a company to an event. For example, in Beijing Summer Olympics, 2008, following Liu Xiang’s injury in the men’s 110m hurdles, Nike released a full page ad in the major Beijing newspaper featuring the image of the disconsolate Liu, a Nike-endorsed athlete, and the tagline: "Love competition. Love risking your pride. Love winning it back. Love giving it everything you’ve got. Love the glory. Love the pain. Love the sport even when it breaks your heart".

  • Property infringement ambushing: The intentional use of protected intellectual property, including trademarked and copyrighted property such as logos, names, words and symbols, in a brand’s marketing as a means of attaching itself in the eyes of consumers to a property or event. For example, in UEFA European Championships, 2008, betting company Unibet released a series of magazine advertisement in Polish magazine, Pitkanoza for online betting on the European Championship, explicitly featuring the words ‘Euro 2008’ and football in their adverts.ling" brand.

B.  Associative Ambush Marketing The term itself is clear as it means intentional use of such terms or imagery which portrays that the company has links to the sport event or property, without making any reference to the official sponsorship. Such different types of associative strategies are:

  • Sponsor self- ambushing: When the official sponsor creates the marketing communication beyond the scope of its sponsorship rights effectively ambushing the other official sponsors. During UEFA European Championship, 2008, the official sponsor Carlsberg extended its promotion beyond the sponsorship rights by giving away headbands to the fans during the tourney, sporting fake team-colour hair, it also gave T-Shirts to the fans visiting the brand’s promotional Booth.

  • Distractive Ambushing: Creating the distraction in or around the place of event, not having any association with the event, in order to gain the attention from the event’s audience and thus promote the brand’s product. For example, in The Open Championship, 2008, Bentley set up a line-up of the Bentley cars outside Hill side Golf club which is adjacent to the Royal Birkdale, the host course of the Open, which attracted great attraction from the event audience.

  • Value Ambushing: Making a direct reference to the event or property’s theme or values to imply a link with the event in the mind of the consumers. For example, Puma, in the European Championship, 2008, in order to promote its football line used the tagline, June 2008: Together Everywhere, thus making a direct reference to the event being played that month.

  • Insurgent Ambushing: use of surprise and aggressive promotion at an event with minimum investment in order to maximise the awareness and to distract the attention of the people from the official sponsors of the event and the event itself. For example, in 2008 French Open- Ronald Garros, K-Swiss ambushed the rivals Adidas and the clothing sponsor Lacoste by setting up a huge purple tennis ball on a crashed car on the major route to Ronald Garros.

  • Pre-emptive Ambushing: When the official sponsor creates the marketing communication in order to usurp any possible ambush marketing campaigns of the rivals, thus prompting the ambush activities and distracting the focus from any of the other official sponsors of the event. For example, in the European Championship, 2008, Adidas produced 16 inflatable footballers wearing the jersey of each country participating in the event with Adidas logo and stripes including those countries which were sponsored by Nike and Puma.

  • Parallel property ambushing: The creation of a rival event or property to be run parallel to the main ambush target, associating the brand to the sport or the industry at the time of the event, thus capitalising on the main event’s goodwill. For example, Nike organised a global contest “human race” in 24 countries around the world including Shanghai, where the Olympics, 2008 was taking place, which was continued for 7 days following the Olympics, and gathered a huge international marketing throughout Olympics centred around Nike and the marathon.

C.  Incidental ambush marketing: When the market communications of a company leads to such incidental ambushing of the official sponsors. It may be done in two ways:

  • Unintentional ambushing: when the consumers incorrectly identifies a non-sponsoring company as an official sponsor due to its previous association or due expectation of association with the event. For example, Speedo earned a considerable attention from media as result of success of swimmers wearing LZR racer swimsuits. This portrayed Speedo as official sponsor of the Beijing Games thus creating confusion in the market.

  • Saturation ambushing: a strategic increase in the marketing communication of a product through aggressive marketing in order to maximise the advertisement during the event by maximising available advertising before, during and after the event. For example, Lucozade, during the Beijing Olympics indulged into aggressive marketing of its products much above its standard marketing featuring athletes and a variety of sports significantly.
Position of law on ambush marketing

Ambush marketing possesses a different situation in different countries as many countries have still not legislated specifically against it. However, resort is sought in the intellectual property law as a remedy to the problem posed by ambush marketing. Various remedies are available in different countries.

(1)  United States of America (U.S.A)

In the United States, an event organizer who owns a federal, state or common law trademark can seek an injunction under Lanham (Trademark) Act, State law or common law against the unauthorized use of the trademark or a colourable imitation. To prevail, the trademark owner must demonstrate a likelihood of confusion for ex. - which consumers would likely believe infringer was affiliated with or sponsor of event. The U.S.O.C (United State Olympic Committee) has a right to control the use of Olympic parks, images. U.S.O.C has been granted exclusive control over the commercial exploitation of Olympic and Paralympics related trademarks, symbols, and terminology through the Amateur Sports Act of 1978 passed by the U.S Congress.

In the case of San Francisco arts & athletics Inc v. United States Olympic Committee, it was held that the statute authorizing the U.S.O.C exclusive use rights in "Olympic trademark does not require the U.S.O.C to prove that unauthorized use caused confusion. The Amateur Sports Act of 1978 was amended and re-codified in the year 1998 as Ted Stevens Olympic & Amateur Sports Act of 1998 (O.A.S.A)

Section 43(a) of the Lanham Act expressly protects the sponsors & limits the competition it protects the sponsorship & endorsements by prohibiting a competitors false designation of origin when it is likely to cause confusion or to deceive as to the affiliation, connection or association of such person with another person, or as to original sponsorship, or approval of his or her goods, services or commercial activities by another person. The case of MasterCard International, Inc v. Sprint Communication Co demonstrates the willingness of courts to protect sponsorship and licensing contracts under Section 43(a) even though there may be no actual consumer confusion.

(2)  Germany

Section 14 of the Trademark Code provides the protection against ambush marketing, so if there is an ambush marketing campaign which includes unauthorized use of any words, symbols, logos or slogans which are similar to or identical with protected trademarks, the mark owner may call for ban of such use and can seek injunctive relief to end the ambush campaign immediately. He can also sue for damages incurred.

Unfair competition code also provides remedy against some ambush marketing practices, but the biggest lacuna is that the Act does not provides the clear rule as to which practices are "unfair" and which are legitimate, however German Courts have expressed that whenever a company is found to be indulged in misleading or deceptive advertising than such shall be considered to be unfair practice. The German government just before the football world cup in 2006 on the request of FIFA passed some anti-advertising ordinances which were meant to protect the interests of official sponsors and to create advertising free "special zones" beyond the boundaries of the stadium ground.

(3)  United Kingdom (U.K)

The position in U.K is very much similar to that in Germany; it will be infringement of a registered trademark for a party without the permission of trademark owner to apply the trademark to nay goods or services. The U.K government in order to protect the interest of sponsors passed London Olympic Games & Paralympics Games Act, 2006. The Act contains anti–ambush marketing provisions although it does not cover Olympic symbol which is protected under U.K Trademarks Act 1994.

(4)  New Zealand

The Major Events Management Act, 2007 protects the interest of sponsors from ambush marketing. The Act aims to curb ambush marketing and prevent unauthorized commercial exploitation at the expense of major event. The Act by its Section 18 clearly provides that "no person may advertise in a clean zone without the written authorization of the major event organizer", the act clearly defines advertising as ‘any form of communication".

(5)  China

The Protection of Olympic Symbols Relations 2002 was passed by the Chinese government, and that it not only protects Olympic symbols & names but also includes an anti ambush marketing clause. The Act was passed soon after china was selected as the host of Olympics 2008.

Law in India

Experiences from the past three decades have proven the fact that ambush marketing is unethical and how important is to have stringent intellectual property protection beside what is provided in for current regime At present, India has not enacted specific anti-ambush marketing laws and accordingly redress must be had to the Trade Marks Act, 1999, the Copyright Act, 1957, the Emblems and Names Act, 1950 and the common law notion of passing off.

(1)  The Copyright Act, 1957

The Copyright Act is a capable tool which provides a remedy in the limited set of instances of "ambush marketing" i.e. where logos or other original works of authorship are used without license by third parties. The Copyright Act, 1957 provides the owner of copyright privilege to enjoy the exclusive rights to reproduce, perform, publish adapt or translate, the copyrighted work and any such act undertaken without the license of the copyright owner would, generally, constitute copyright infringement. Now as per the Act infringement consist of two essential elements:

  • There must be sufficient objective similarity b/w the infringing work and the copyright work,

  • The infringing work must have been derived from the copyright work.

'Lay observer test' holds a prominent position in Indian context, this test is applied by Indian courts in order to evaluate the cases concerning alleged copyright infringement. The test relies on the belief that "if to the 'lay observer' it would not appear to be reproduction, there is no infringement of copyright in the works". In regard to "ambush marketing" the Delhi High Court in case of ICC Development V. Evergreen Service Station, recognized a limited role of copyright law in granting an injunction preventing the defendants from using the logo of "ICC World Cup 2003" consisting of black & white strips and the mascot "dazzler" holding these to be "artistic work" protected under section 2(c) of the copyright Act, 1957.

(2)  The Emblems and Names (Prevention of improper use) Act, 1950

The Act serves the purpose of preventing the improper use of certain emblems and names for professional & commercial purpose, the restrictions provided under the Act are in regard to-
  • The improper use of certain protected emblems and names; and

  • The prohibition on registration of certain companies and other bodies, trademarks and designs as well as grant of patents that bear a title containing any protected emblem or name.

In order to be protected under this legislation, an emblem or name must be notified in the official gazette and included in the schedule to the Act, while the only sports –related emblem and name currently notified and protected are "the name and emblem of the international Olympic committee consisting of five interlaced rings".

(3)  The Trademark Act, 1999

The Trademark Act, 1999 provides that a trademark may be registered or unregistered, when the trademark is registered the registrant is granted certain privileges these are:
  • Title to mark established which enables the trademark owner to avoid proving his title against any infringement of the mark.

  • The exclusive right to use the registered trademark in relation to the goods or services in respect of which the trademark is registered

  • The right to obtain relief in respect of infringement of trademark.

What is necessary is that the applicant must be able to show 'distinctiveness' of such trademark which he sought to get registered. A trademark which is not of distinctive character or a trademark which is "deceptively similar” to an existing trademark will not be registered. The key determinant in determining copyright infringement is "likelihood of confusion” in the mind of consumer. Whenever there is an instance of registered trademark infringement, the following element must be present:
  • Use of a registered trademark by a person other than its registered proprietor or registered user.

  • Use of either of the whole of the registered trademark or an adapted one by making a few additions or alterations.

  • The infringing trademark is identical or similar to the trademark already registered.

  • The likelihood of causing confusion on the part of public. Advertising of the registered trademark in such advertisement takes unfair advantage.

  • In the case of ICC Development V. Arvee Enterprises and Anr, it was said that for a plaintiff to find success in his claim, he must prove that there was "likelihood of confusion" in public mind that the defendants were sponsors or license of world cup. The defence of "nominative fort use" shall also be considered, the registrant of a trademark is not granted the right to limit the bonafide use by an unlicensed third party of his trademark to describe the character or quality of the trademarks registrant's good or services, so where a defendant uses a trademark to describe the plaintiffs product rather than its own , a fair use defence is available provided that the product or service in question is not identifiable without using the trademark, that only so much of the marks are used as is reasonably necessary to identify the product or service and the defendant has not done anything that would suggest a sponsorship.

    As per the trademark Act, 1999 nobody is entitled to institute any proceeding to prevent or to recover damages for the infringement of an unregistered trademark. But nevertheless the Act provides that nothing in the Act shall be deemed to affect the right of any person for passing off goods or services, as the goods of another person, as serves provided by another person or any available remedies. A passing–off action is thus maintainable under the law of law of tort or common law of right.

Necessary ingredients in the action for tort of passing–off involve:
  • That certain names were distinctive and related to a party’s goods , and

  • That a third party's use of name was likely to deceive and thus causes confusion and injury to business reputation of former party.

The vital element in passing-off cases is the probability of deception, while in an action for passing off, the onus lies upon the aggrieved party to establish the existence of the business reputation sought to be protected, further in a passing-off action, fraud is not necessary element and thus the absence of ‘intention to deceive’ is not available as defence. Foreign trade marks which have a reputation in India are also provided the same protection which is afforded unregistered marks, the factor determining the reputation is the degree of extensive advertisement and publicity & based on the fact that same mark was in the use in a number of other geographical regions around the world. As far as Indian courts are concerned they expressly recognize the existence of trans-border reputation and grant injunctions in cases where a third party attempts to desire economic benefit from the reputation established in a particular trade by another.

The test of "confusion" is to be applied in such matters where "a man of average prudence and of imperfect recollection would be confused". If the goods are not similar and the trade names, logo, scheme etc used are not likely to cause confusion in the minds of customers, no injunction to restrain the use of trade name will be granted, because there cannot be any monopoly in the use of the trade name in respect of the goods falling in different classes.

Necessity of Legislation

As India is trying hard to bid for either 2020 or 2024 Olympics, the controversial practice of 'ambush marketing' will come under scanner. No cricket lover can easily forget the instance of 1996 cricket world cup where Coca Cola was the official sponsor but its sponsorship was clearly overshadowed and ambushed by the cheeky and catchy slogan "nothing official about it" of Pepsi, although now times have changed and India has recently have organized the most successful cricket world cup ever both in monetary and popularity context and without any major controversy, but that is largely due to cricketing policies of I.C.C (International Cricket Council).

Today the stakes in sports are much higher for example the broadcasting rights of the cricket world cup of 1996 was bought for an nominal amount of $ 15 million but for 2011 and 2015 cricket world cup the amount increased up to $ 1.1 billion ,the sponsors are very much concerned about their rights and interests although protection provided under trademarks act, competition law seems to be enough to deal with every situation of ambush marketing but in reality they are not enough and are not sufficient for each and every situation, lets again discuss the "nothing official about it" campaign by Pepsi it was more or less a spoof or parody on the official sponsor but in reality it was a smartly done act of ambush marketing, the point of determination remains whether any business/official association with the event is implied indirectly, even today a smartly done act of spoof or parody like "nothing official about it" will not be attract the provisions provided to attract ambush marketing.

Over the years, the nature and role of sports sponsorship has changed dramatically from altruistic patronage to calculated spend money, the expectation of concrete measurable 'return' on "investment" have become of paramount concern,the laws provided under trademark, copyright infringement, passing off or unfair competition can only be a stop gap arrangement and not a permanent solution.

Although the event organizers, sponsors, sportspersons do sign contracts of exclusive sponsorship before any major event so as to protect their rights and interests, like we have seen in recently concluded cricket world cup where the rules of I.C.C prohibited players from indulging in any sort of ambush marketing but these contracts limits each of their rights to interact or associate commercially with competitors of official sponsors in-stadia and in some cases for a period of time surrounding the event. As regards the world at large they have no rights other than trademark, passing off, false advertising and unfair competition laws, as a result, the contractual restraints described above in conjunction with existing law are of very limited use in curbing ambush marketing by opportunistic actors.

If we look at the examples of countries which have organized major events Australia (Olympic 2000),China (Olympic 2008), Canada (Winter Olympic 2010), and U.K (Olympic 2012) all of them either have passed event–specific legislation or amended existing laws to contemplate protection of the official sponsors of their major sporting events.

A major international sporting event plays a very significant role in developing economy and sports and also in promoting tourism, these major sporting events do require sponsors and no sponsor would invest their money at the risk of tribulations of ambush marketing. They also looks for return on their money and without proper legislation it will not be easy to attract sponsors so in order to promote sports and attract major sponsors there is an urge for proper legislation.

Conclusion

Ambush marketing is not a new phenomenon but lately due to increase in sports events at the world level, ambush marketing has been making headlines. In order to avoid ambush marketing, organizers are making an effort to make such rules or guidelines which gives them the power to take action against the wrongdoer. It is now common to make legislation before any major event for example; the London Olympics Bill, published on 15 July 2005, debated in Standing Committee, and amended on 18 October 2005. It deals in particular with regulation of advertising activities and commercial exploitation in connection with the Games and protection of the Olympic intellectual property such as the Olympic symbol, motto, and associated words. This act shall cease to be in force on 31st December 2012. The objectives of doing so are to protect the financial investment made by official sponsors and maximize the return to organisers of the event which, without official sponsorship, would be unlikely to take place. Today an obnoxious amount of money is at stake, thus one can see the hard work involved to stop the ambushers. Therefore the time has come to implement a legislation which protects the rights of the official sponsors and also infringement of the intellectual property rights.
MANISH TIWARI & RADHIKA BHARGAVA are 4th year students pursing B.A. LL.B (Hons.) from Amity Law School, New Delhi.
 
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