Canada: Playing by the Rules – Ambush Marketing and the Olympic Games

Last Updated: July 6 2016
Article by Nicole Vidinu

The Olympic Games represent one of the biggest opportunities for a company to increase exposure of its brands to consumers on a global scale over a concentrated period of time.

The London 2012 Olympic Games is a prime example of the marketing value of the Games. The 2012 Summer Olympics marked a record broadcast audience with a global reach of 3.6 billion people – the highest in Olympic Games history – across 220 countries and territories around the world (IOC Marketing Report). Given its broad and far-reaching coverage, the Olympic Games are an invaluable tool for companies seeking to advertise their products or services to billions of consumers across the world.

With the Rio 2016 Summer Olympic Games around the corner, many Canadian and other companies from around the world are seeking to take advantage of this small window of opportunity to promote their brands. However, brand owners must understand how to play by the rules when it comes to the Games.

What is "ambush marketing"?

Brand owners can market their products or services during the Olympic Games by becoming an official sponsor or licensee. Official partners are granted the rights to specific Olympic intellectual property and Olympic marketing opportunities in exchange for financial support and/or goods and services contributions (IOC Olympic Marketing Fact File). However, becoming an official sponsor or licensee of the Olympics Games comes with a price tag.

In an attempt to undercut the fees and/or obligations associated with official sponsorship, some companies have sought to exploit the popularity of the Olympic Games to market their brands through a technique called "ambush marketing".

Ambush marketing is generally understood as an attempt by a company to capitalize on the popularity of a major event by associating itself or its products or services with the event without having paid the fees to become an official sponsor or partner. Ambush marketing generally falls within two categories:

  1. Ambush marketing by association occurs when a brand owner seeks to associate itself with the event – either directly or indirectly. Examples include increasing advertising on television shortly before, during or directly after an event, or using an event name or mark without permission.
  2. Ambush marketing by intrusion occurs when a brand owner places their own marks or logos in the same physical space as the event in an attempt to increase media exposure or to be seen by attendees at the event itself. Examples include, using a branded plane or blimp over the airspace of the event or handing out branded products to the event-goers during the event.

Although seemingly harmless, ambush marketing is detrimental to various parties for many reasons – most notably for its negative impact on corporate sponsorship. Revenue generated by commercial partnerships accounts for more than 40% of the Olympic Games revenues (The Olympic Partner Programme). When an ambusher associates itself with the Olympic Games without paying the fees for an official partnership, the value of corporate sponsorship is diminished, which makes these events less likely to receive commercial sponsorship in the future. This is a serious issue for many major events, including global sporting events such as the Olympic Games, which heavily rely on corporate sponsorship as a source of funding.

While ambush marketing can occur in many different forms, regardless of the form it may take, it has become an increasingly problematic issue that has driven legislative change in many host countries of sporting events globally.

Is ambush marketing prohibited during the Olympics Games?

Ambush marketing activities often fall outside of many of the general laws in place to protect intellectual property rights holders. Accordingly, prior to the enactment of specific anti-ambush marketing laws, the types of legal remedies available to ambushed parties in Canada and elsewhere were limited. While independent causes of action such as trademark infringement, passing off, and false or misleading advertising are available, few, if any, adequately address ambush activity and few have met with success.

In response, event organizers for major sporting events such as the Olympic Games and the FIFA World Cup have taken steps to fight ambush marketing by seeking to enact legislation to specifically deal with this issue.

Anti-ambush marketing legislation was introduced for the first time during the Sydney 2000 Olympic Games with the enactment of the Sydney 2000 Games (Indicia and Images Protection) Act 1996. Many other host countries, including Canada, have since followed suit. Successful host city bids are now required by the International Olympic Committee to put in place appropriate legislation that protects against ambush marketing.

Canada introduced ambush marketing legislation prior to the 2010 Vancouver Winter Olympic Games with the enactment of the Olympic and Paralympic Marks Act ("OPMA"). Section 4(1) of OMPA, for example, provides that during the prescribed period, persons may not "in association with a trade-mark or other mark, promote or otherwise direct public attention to their business, goods or services in a manner that misleads or is likely to mislead the public" into believing:

(a) the person's business, goods or services are approved, authorized or endorsed by an organizing committee, the Canadian Olympic Committee ("COC") or the Canadian Paralympic Committee ("CPC"); or

(b) a business association exists between the person's business and the Olympic Games, the Paralympic Games, an organizing committee, the COC or the CPC. (Olympic and Paralympic Marks Act, SC 2007, c 25.)

Schedule 3 of OMPA provided a list of expressions that were used to determine whether a person had engaged in ambush marketing contrary to Section 4(1). At the time of the Vancouver Olympic Games, such expressions included: Games, 2010, 21st, Tenth, and Medals, among others.

Interestingly, section 6 of OMPA also lowered the threshold for obtaining injunctive relief against ambush marketers, removing the requirement for an ambushed party to prove that they will suffer irreparable harm.

The 2016 Rio Olympic Games are similarly protected against ambush marketing. In preparation for the upcoming Games, Brazil has enacted specific legislation including the Olympic Act (Law 12,035/2009) to protect official sponsors from ambush marketing.

Article 8 of Brazil's Olympic Act extends protection to the use of terms and expressions that would cause undue association with the Rio 2016 Games or the Olympic Movement.

This increasing trend towards protection of intellectual property and sponsorship rights is reflected in the Rio 2016 Brand Protection Guidelines:

The official partners that associate themselves with the Games, mainly due to their belief in the philosophy contained in the Olympic and Paralympic ideals, will add great value to the construction and strengthening of the brands, products and services.

Accordingly, it is extremely important to ensure the partners the right to associate themselves with the Games and preserve the emotional and commercial value of the brands.

You are the victim of ambush marketing – What do you do?

If you are the organizer of an event where your sponsors expect exclusivity, or if you are an official sponsor of an event, you will want to ensure that there is no ambush marketing or as little as possible.  If you become aware of any ambush marketing, it will likely be best to stop it as soon as possible, both to limit harm at the moment, but also to discourage ambush marketing by others in the future.

If you become aware of ambush marketing at your event, you should seek legal advice immediately, since there may only be a very small window of opportunity to prevent the harm from spreading further at the current event or at future events.

You have received a Cease and Desist letter – What do you do?

While the above information presents some examples of the types of activities that may fall under the broad umbrella of "ambush marketing," the definition of "ambush marketing" is constantly changing and expanding.

If you find yourself in receipt of a cease and desist letter with allegations of ambush marketing, it is important to take the matter seriously. There are steps that can be taken to minimize the difficulties, such as the following:

  • Don't ignore the letter
  • Make note of the deadline for response set out in the letter
  • Immediately obtain expert legal advice, which should provide a full and complete assessment of your options to help you decide how to respond to the complaint

For further information on this topic, or other Canadian marketing and advertising issues, please contact a member of our firm's Marketing & Advertising group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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