Austria: Go Ambush Marketing, Stay Legal

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

The term "Ambush Marketing" was invented by the advertising business in the US in the 1980s. It stands for a special kind of marketing campaign where companies cleverly connect their goods or brands with a popular, often athletic, event.

Ambushers often try to catch a free ride by paying no sponsorship fees but making consumers believe they are official sponsors. From a legal point of view, the types of Ambush Marketing vary from creative strategies not breaking any laws to the illegal use of logos, phrases, slogans and the like.

Enhance brand equity

The target of ambushers is to enhance their own brand equity by linking their brand to the positive equity of events with special strategies at low cost. At the Olympic Games in Beijing 2008, KFC used the associative marketing slogan "I love Beijing". And Pepsi replaced its usual blue cans with red ones "to show their respect for the year of China"1. However, the official sponsors were McDonald's, not KFC, and Coca Cola (with its red cans), not Pepsi.

In New Zealand, Telecom New Zealand Ltd succeeded during the 1996 Atlanta Olympic Games 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 while referring to their new mobile phone.

Other major sporting events, such as the FIFA World Cup, and public characters, such as celebrated athletes, are targeted by Ambush Marketing campaigns. A McDonald's campaign took a ride not only on the passions of the FIFA World Cup 2006 but also on the positive equity of the Austrian Federal Chancellor. Wallpaper posted all over Vienna showed the Federal Chancellor Wolfgang Schüssel holding up a red-white-red (the colours of the Austrian federal flag) scarf saying "AUSTRIA IS WORLD CHAMPION".

All such activities are considered "Ambush Marketing" in the advertisement business. But from a legal point of view, we need to take a closer look and differentiate.

Direct and 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 became famous with its indirect Ambush Marketing campaign at the New York City Marathon 1997. Although Toyota was the official automotive partner of the marathon, Mercedes had its name written in the sky above the event by aeroplanes. Other examples are the "I love Beijing" advertisements for grilled chicken during the Summer Olympic Games 2008 in China or the "We will get the title" campaign of Media Markt in Germany at the FIFA World Cup 2006.

Smart indirect ambushers seek to succeed in linking the sponsored activity to their brand without any intention to violate trademark or copyright rights by using protected logos or words for their advertising campaigns. However, the question whether the campaign leads to unlawful and incorrect consumers associations or constitutes any other infringements needs also to be checked with respect to unfair competition law.

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 also 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)2, imitation marketing of corporate brands (Sec 9 UWG) and other unfair business practices falling within the general clause of Sec 1 UWG. Furthermore, 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 competition3.

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 Chancellor Schüssel example above).

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.

Ambush Marketing actions are usually short-lived campaigns which flash into action. A court decision ordering an injunction will therefore often 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 – only such damages are hard to prove.

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

Footnotes

1 Söderman/Dolles, Strategic fit in international sponsorship – the case of the Olympic Games in Beijing 2008, International Journal of Sports Marketing & Sponsorship (SJSMS), January 2008, 98.

2 Anderl/Appl in Wiebe/G. Kodek, UWG (2009) § 2 Rz 325; Duursma/Duursma-Kepplinger in Gumpoldsberger/Baumann, UWG Ergänzungsband § 2 Rz 38.

3 Austrian Supreme Court (Oberster Gerichtshof – OGH) 17.9.1996, 4 Ob 2206/96g – Football Association – ÖBl 1997, 83. See also Horak, "Ambush-Marketing" und die EURO 2008 – Angriff auf das Werbemonopol!, ecolex 2007, 416.

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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