Austria: The World Cup and Ambush Marketing

The world's biggest sporting event, the FIFA World Cup, runs for the next month, meaning "Ambush Marketing" will also be in the headlines.

"Ambush Marketing" stands for a special kind of marketing campaign where companies cleverly connect their goods or brands with a popular, often athletic, event, such as the World Cup. Ambushers often try to catch a free ride by paying no sponsorship fees but making consumers believe they are official sponsors of the event. From a legal point of view, Ambush Marketing ranges from creative strategies that do not break any law to clearly illegal uses of logos, phrases, slogans and the like.

Sports as a prime target

McDonald's was the official sponsor of the Beijing Olympics. But in the lead-up to the games, KFC used the marketing slogan "I love Beijing", while Pepsi replaced its usual blue cans with red ones "to show their respect for the year of China".

During the 1996 Atlanta Olympic Games, referring to their new mobile phone, Telecom New Zealand Ltd was successful with an ambush advertisement containing the word "ring" (for the sound of a ringing phone) arranged five times like the Olympic rings and in the Olympic colours.

McDonald's was also at work during the 2006 FIFA World Cup. Its Austrian advertising campaign showed the Federal Chancellor Wolfgang Schüssel holding up a red-white-red scarf (the colours of the Austrian flag) saying "AUSTRIA IS WORLD CHAMPION".

The 2010 FIFA World Cup

With regard to the 2010 World Cup, which has just started in South Africa, FIFA wants to ensure that only official sponsors advertise their brands in connection with the event.

Kulula, a South African airline who is not an official sponsor, placed ads with the slogan: "UNOFFICIAL NATIONAL CARRIER OF THE 'YOU-KNOW-WHAT'". In the ad the national flag, footballs and a special kind of plastic horn used by South African fans at soccer matches (the so called "vuvuzela") were shown. Kulula is generally known in South Africa for its humorous advertising. According to various reports on the internet, FIFA warned Kulula that the combined use of these attributes created an unauthorised association with the event and was illegal.

Kulula reacted to the warning by placing new ads with the slogan "NOT NEXT YEAR, NOT LAST YEAR, BUT SOMEWHERE IN BETWEEN". The new ad shows a bridge resembling the Cape Town World Cup stadium and golf tees looking like vuvuzela with the accompanying text "Definitely, definitely a golf tee", and other pictures with humorous remarks.

Although all such activities may be considered Ambush Marketing in the advertising sense, from a legal point of view we need to differentiate.

Direct v. indirect ambush marketing

Direct Ambush Marketing activities, such as the unauthorised, illegal use of a registered logo on merchandising goods, or a false or misleading claim to be an official sponsor of an event, clearly constitute infringements.

Indirect Ambush Marketing, on the other hand, is more subtle and falls within a legal grey area. Mercedes' indirect Ambush Marketing campaign at the New York City Marathon 1997 is famous. Although Toyota was the official automotive partner of the marathon, Mercedes had its name written in the sky above the event by aeroplanes.

Another example is Media Markt's "We will get the title" campaign at the 2006 FIFA World Cup in Germany, or the previously mentioned KFC slogan "I love Beijing".

Smart indirect ambushers link the sponsored activity to their brand without violating trademark or copyright rights. The question is whether the campaign leads to unlawful consumers associations or other infringements, such as unfair competition.

Trademark protection

Ambushing clearly breaches intellectual property laws when trademarks are used without a contractual right or licence and trademark rights are infringed. According to the Austrian Trademark Protection Act (Markenschutzgesetz; MSchG) not only the use of an identical sign but also the use of a similar sign with a likelihood of confusion may be illegal. The protection of trademarks with reputation is even stronger. The owner of a trademark with reputation may request third parties to refrain from using an identical or similar sign for goods or services which are not similar to those protected under the trademark.

Unfair competition

Complementary to trademark law, designated regulations of the Austrian Act against Unfair Competition (Gesetz gegen Unlauteren Wettbewerb; UWG) supplement intellectual property law. Unfair business activities include misleading business practices (Sec 2 UWG), imitation marketing of corporate brands (Sec 9 UWG) and other unfair business practices falling within the general clause of Sec 1 UWG. Furthermore, according to the Austrian Supreme Court, an unfair exploitation of the good reputation of an event or false allegations in advertisements misleading the public about the status of the ambusher as an official sponsor may be considered as unfair competition.

Copyrights and personal rights

Intellectual creations in the area of literature, photography, music and art enjoy (without registration) copyright protection under the Austrian Copyright Act (Urheberrechtsgesetz; UrhG). Personal rights such as the right to one's own image may also be violated by an advertising campaign (see the previous Chancellor Schüssel example).

Remedies

To the holder of intellectual property rights, Austrian law provides for remedies such as an action for preliminary or permanent injunction, compensation, orders for disposal and destruction or publication of the judgement. The holder of rights may also initiate criminal proceedings against the infringer in various intentional cases.

However, Ambush Marketing campaigns are usually short-lived. Those associated with the 2010 World Cup will end in July when the event ends. That means that a court injunction would probably come too late. Even preliminary injunctions do not provide for much protection in the ambush competition. Ambush Marketing cases are therefore rarely actionable and the claimant will usually be referred to damages - but damages are hard to prove.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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