Ambush Marketing: Coming Soon to a Stadium Near You
Jan 22, 2013 QuickCounsel Download PDF
By Dickerson M. Downing, Rodrigo Azevedo, Mary R. Bram
The upcoming 2014 FIFA World Cup Brazil™ and the 2016 Summer Olympic and Paralympic Games will not only bring the world’s best athletes and multitudes of visitors to Brazil, but they will also bring an onslaught of what is known as "ambush marketing."
Prestigious international sporting events, like the World Cup and Olympics, draw worldwide attention and can offer a great opportunity for advertising and promotional activities. Official sponsors can pay tens of millions of dollars for the privilege of being associated with these types of events. Not everyone can or wants to pay for that privilege. Ambush marketing is a strategy employed by a non-sponsor to try to associate itself with the event without authorization from the event organizer and without paying the sponsorship fee, often to the detriment of the official sponsor and its brand.
There are many types of ambush marketing. The term "direct" ambush marketing is used to describe activities where a party improperly uses the trademarks or logos of an event or otherwise falsely represents that it is associated with the event. Although direct ambush marketing does occur, it often can be stopped by the application of traditional intellectual property law pertaining to counterfeiting, infringement and false advertising.
Far more common and far harder to stop is the myriad of different, and often very creative, marketing activities swirling around a major event that are sometimes referred to as “indirect” ambush marketing. With indirect ambush marketing, the ambush marketer seeks to evoke the event, or create some association with the event, or take advantage of the people coming to the event, without actually infringing any protected marks or works or making any express false representations. The goal often is to get as close to the legal line as possible without crossing it. Indirect ambush marketing can take many forms. In order to prevent this type of activity, special legislation often is needed.
One perfectly legal means of attempting to associate a product with the event is to buy advertising space on broadcasts of the event or, subject to certain exceptions, in local media where the event is taking place. A more insidious variation of this strategy involves attempts to establish a marketing presence in very close physical proximity to the event to attract people attending the event (sometimes called "distraction" ambush marketing). This can include putting up billboard advertising or engaging in promotional and sales activities very near the event locations. One company even made a practice for years of flying blimps bearing its trademark in the airspace above events. One of the more memorable examples of this type of ambush marketing occurred at the 1996 Summer Olympics in Atlanta, where REEBOK was the official shoe sponsor, but NIKE bought billboards around the event site and built an entire NIKE village near Olympic Park.
Other ambush marketers may make playful allusions to the event. Paddy Power, an online gambling company, put up billboards during the London 2012 Olympics announcing that it was the Official Sponsor of the Largest Athletics Event in London This Year, but, as the advertising explained, the London in question was London, France (who knew) and not the London of Dickens, the Spice Girls, and the 2012 Olympics. The event, by the way, was an Egg and Spoon Race. Another widely used method of ambush marketing is to use athletes themselves. The same folks at Paddy Power who located London, France convinced a soccer player to wear and, more remarkably, find a way to publicly display, his PADDY POWER brand underwear during an important match for all the soccer world to see.
While the International Olympic Committee has a rule prohibiting Olympic athletes from using their name or likeness for advertising during the term of the Olympics, the rule does not prohibit the athletes from wearing non-sponsor manufactured outfits. Or shoes. At last year’s Olympics, NIKE, once again a non-sponsor, encouraged over 400 runners and other athletes to wear its very distinctive and intentionally eye catching yellow VOLT shoes during Olympic events attracting considerable attention and publicity. (In 2016, the shoe will be on the other foot at the Olympics in Rio de Janeiro, where NIKE will be the official sponsor of Rio 2016™ and could be the victim, rather than the beneficiary, of ambush marketing activities.) The host country or city routinely will enact anti-ambush marketing laws and adopt aggressive plans for enforcement of those laws well in advance of a major event and many major events require assurances in this regard as a condition for awarding the bid. This legislation often prohibits distraction type ambush marketing in proximity to the event by establishing defined zones of protection. It also can include other measures regarding the type of "association" representations that cannot be used in advertising. In anticipation of the London 2012 Olympics, for example, the U.K. passed strict special event legislation to prohibit certain marketing activities, including the prohibition of any representations to falsely suggest an association with the Olympics Games. In determining whether a marketer had violated this anti-association act, the court was instructed to consider whether the marketer used combinations of terms such as "Games" and "2012" or "London" and "Sponsors."
However, even with special legislation, not all types of ambush marketing activities can be prevented given the pre-existing legal frameworks of the host countries.
Soon it will be Brazil’s turn. What type of laws does Brazil have to prevent ambush marketing? Certainly, the traditional Brazilian intellectual property legal scheme does not specifically address most types of ambush marketing. That being said there are traditional laws that can protect intellectual property owners, event sponsors and even athletes under some circumstances. These include the Brazilian Industrial Property Act, the Copyright Act, the Sports Act and even the Civil Code.
The Brazilian Industrial Property Act, for example, may be used to prevent a direct ambush marketing strategy, as it prohibits unauthorized registration of reproductions or imitations of names and symbols of officially recognized sport events, as well as unauthorized registration of authentic names and symbols of officially recognized sport events. The Brazilian Sports Act - also known as the Pele Act - complements this trademark protection, by protecting the names and symbols of some sports administration entities regardless of whether formal registration has occurred. Under the Brazilian Copyright Act, event mascots, posters and trophies can be protected from misappropriation and copying if they satisfy the basic minimum requirements for copyright protection. Additionally, the Brazilian Civil Code requires permission prior to using the image or the name of any person - particularly famous individuals, such as some athletes - for commercial purposes, which can also help prevent direct associations during sports events.
Perhaps the only traditional intellectual property approach in Brazil that might be applied to indirect ambush marketing might be the unfair competition law, which prohibits the act of fraudulently diverting someone else's clients. Even so, this is a very broad legal concept, depending on a case by case judicial analysis.
These traditional tools are all part of the existing intellectual property protection in Brazil. However, as a practical matter, there are very few ambush marketing precedents and the majority of cases that have arisen have involved unauthorized associations with the well known yellow t-shirt of the Brazilian national soccer team. Moreover, all these legal tools include certain built in limitations and exceptions in Brazil, to preserve the public interest and the Constitutional rights of open competition, free enterprise and free speech.
In an effort to bolster its intellectual property laws in anticipation of the World Cup and the Olympics, Brazil recently enacted two new laws: one directed towards the Olympics and the other directed towards the World Cup. In 2009, Brazil enacted the Olympic Act, which protects Olympic symbols, mascots, flags and trademarks and prohibits their use by any unauthorized person or entity. The Olympic Act, does not contain any express indirect ambush marketing prohibition, nor does it contain any criminal provisions. More traditional law will have to be applied.
More recently, in June of 2012, the Brazilian World Cup General Law (English Version) was enacted, which is the first legislation in Brazil to specifically address the topic of ambush marketing. The World Cup Law establishes the standards governing the FIFA Confederations Cup Brazil 2013, the 2014 FIFA World Cup, and related events. The law provides for the recognition and special protection of the famous FIFA trademarks and protects FIFA’s rights with respect to the images and sounds of the soccer matches and events.
In addressing ambush marketing, the World Cup Law grants to FIFA the exclusive right to exploit the trademarks, publicity and marketing opportunities associated with the World Cup. This includes the exclusive right to control promotional activities and street commerce, in the vicinity of the events and on the main access roads to the events. It also includes the right to control the sale of food and beverages, the distribution of pamphlets or other advertising and promotional materials, as well as the use of aerial or nautical marketing through balloons, aircraft, or watercraft. The World Cup Law defines and prohibits "ambush marketing by association" and "ambush marketing by intrusion" (“distraction”) and provides for fines and penalties of imprisonment for violation thereof.
The World Cup Law also prohibits the use of event tickets for marketing and promotional purposes, including offering them as prizes and the public exhibition of matches as part of an advertising or promotional activity.
In summary, some laws to combat ambush marketing are in place, but are they enough and how will they work in Brazil? That is an open question. Some have argued that even with the recently enacted Olympic and World Cup laws, more protection is needed to prevent ambush marketing. Others have questioned the constitutionality of such anti-ambush provisions – particularly if applied to local businesses already established near the official venues of competitions – or if applied in a manner that would upset the generally accepted notion of free competition and free enterprise in Brazil. This is anticipated to be a very controversial topic in Brazil in coming months.
Just because there are rules against ambush marketing does not mean it is always a good idea to strictly enforce them. A case in point: During the 2010 FIFA World Cup South Africa™, Bavaria, a Dutch beer company, hired three dozen young women to sit together at a match between Holland and Denmark wearing bright orange outfits. The outfits reportedly were unbranded but had been used in a prior promotional event for the company. The potential harm that might be caused by a small group of women attending a soccer match dressed in orange –the color of the Holland team –is debatable. However, the activity did violate the South African “Contravention of Merchandise Act” and someone thought it might be a good idea to enforce it. It wasn’t. The young women were ejected and two of them arrested. From that point, it was inevitable that the photogenic young ambush marketers would become overnight sensations and the recipients of extraordinarily sympathetic worldwide press coverage much of which referred to Bavaria beer. The enforcers had unintentionally generated worldwide free publicity for the ambush marketer. Before enforcing these rules, careful consideration should be given to the potential harm to the sponsor or the event versus the potential consequences of inaction, particularly where the act in question does not involve counterfeit activities or intentional false representations.
Published on January 22, 2013
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