Canada: Danger In The Korean Peninsula: Ambush Marketing And The Olympic Games

Last Updated: February 7 2018
Article by Andrea Kroetch

For a few weeks every two years, the Summer and Winter Olympic Games offer brand owners and advertisers the opportunity to reach billions of people in hundreds of countries. The Summer Games in Rio 2016 reached a television audience of 3.2 billion people across the globe, while the 2014 Sochi Winter Games reached 2.1 billion and both Games also saw a digital audience of over one billion viewers. This global reach and ubiquity make the Olympic Games an invaluable marketing and advertising avenue for companies seeking to attract consumers worldwide.

With the PyeongChang 2018 Winter Games starting later this week, companies in Canada and around the globe may see a golden opportunity to reach a massive global audience and to promote their own brands, goods and services. However, Olympic marketing is not a free-for-all and there are rules in place to prevent 'ambush' marketing. Advertisers and marketers should be aware of these to ensure their activities do not place them offside.

What is "Ambush marketing"?

Ambush marketing refers to using a variety of strategies to gain significant advertising and marketing benefits through unauthorised or unlicensed association, i.e. without an official sponsorship. Widely promoted and watched events like the Olympic Games, the FIFA World Cup and the NFL's Super Bowl, are prime targets as companies attempt to link their brands with these events and their associated goodwill.

The International Olympic Committee (IOC) offers official partnership to corporations in exchange for financial support and goods and services contributions. Corporations that come to an agreement with the IOC are granted the rights to specific Olympic Games-related intellectual property (IP) and marketing and advertising opportunities. The grant of rights is exclusive to official sponsors . As a result, Olympic sponsorship is expensive and some companies will attempt to avoid the obligations while still benefitting from the Olympic advertising spotlight through ambush marketing.

Capitalizing on the popularity of Olympic-type events by way of ambush marketing can occur in two ways: 

  1. Ambush marketing by association occurs when a brand owner seeks to associate itself with the event – either directly or indirectly – by, for example, increasing advertising on television shortly before, during or directly after an event, or using an event name or mark without permission. A well-known example arose during the 2013 Super Bowl, when power went out in the Superdome in the third period of the game. OREO cookies' seized the opportunity by tweeting the message "Power Out? No problem" which was accompanied by an ad showing a single, starkly-lit OREO cookie beside the caption "You can still dunk in the dark". The tweet quickly went viral allowing OREO to capitalize on the event without being an official sponsor.

  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 event attendees. Examples include using a branded plane or blimp over the event airspace or handing out branded products to the event-goers during the event.  For example, at the Summer Games in Rio 2016, the activewear brand Under Armour installed branded outdoor exercise areas along Copacabana Beach, which was the location of many of the Olympic events.

As one can imagine, ambush marketing can have considerable consequences. The partnership between official sponsors and the Olympics is expected to provide benefits for both sides. Organizers of these events generate revenue from selling official sponsorship rights which go towards supporting the event. Official corporate sponsors of the events make a significant investment to secure the right to be the exclusive corporate sponsor of the events.  

When ambush marketers associate themselves with the Olympic Games without paying to be official sponsors, the value of official partnerships is diminished. As a result, future commercial sponsorship becomes less appealing to potential sponsors. Where global sporting events and the like rely heavily on corporate sponsorship for a significant proportion of their funding, ambush marketing indeed becomes a serious matter.

Regardless of its form, ambush marketing has become increasingly problematic for events like the Olympic Games and has driven organizers to push for legislative change in countries hosting global sporting events.

Ambush marketing and the Olympic Games

In Canada and abroad, ambush marketing is not easily captured by traditional laws protecting intellectual property. While independent causes of action, such as trademark infringement, passing off, and false or misleading advertising are available, few, if any, adequately address ambush activities. Those that do are met with limited success.

Lacking protection from general intellectual property and advertising laws, organizers for global events like the Olympic Games, the FIFA World Cup tournaments and the NFL's Super Bowl have pushed for legislation to specifically address ambush marketing concerns.

As a result, anti-ambush marketing legislation was first introduced for the Sydney Olympic Games in 2000 with the enactment of the Sydney 2000 Games (Indicia and Images Protection) Act 1996. Many subsequent host countries, including Canada's Olympic and Paralympic Marks Act (OPMA), have since followed suit. The IOC now requires that host cities put in place appropriate legislation dealing with ambush marketing practices. Ambush marketing legislation has also since expanded outside of the Olympic context.

Canada's OPMA, introduced in 2007 in anticipation of the 2010 Vancouver Winter Olympic Games, is a good example of what legislation seeking to address ambush marketing can look like. Section 4(1) of OPMA, 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:

  1. 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

  2. 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 OPMA 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 OPMA 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 PyeongChang 2018 Olympic Games have seen South Korea introduce similar legislation to supplement existing IP and marketing laws by way of the Special Act on Support for the 2018 PyeongChang Olympic and Paralympic Winter Games (Act No. 11226) (the Act) and the Enforcement Decree of the Special Act on Support for the 2018 PyeongChang Olympic and Paralympic Winter Games (Presidential Decree No. 24054) (the Decree). Designed in part to protect official partners' and sponsors' advertising rights, the Act and the Decree prohibit the unauthorized use of Olympic indicia. For example, Article 25 of the Act states:

Those who intend to use Games-related symbols, etc. prescribed by Presidential Decree, such as insignias and mascots designated by the Organizing Committee shall obtain approval from the Organizing Committee in advance: Provided that this shall not apply if they use such symbols, as prescribed by Presidential Decree.

Article 10 of the Decree further describes the designated insignias and mascots, as well as the exceptions to Article 25.

The PyeongChang 2018 Brand Protection Policy further highlights the importance of protecting intellectual property and sponsorship rights associated with the Olympic Games:

Brand protection refers to any and all activities to ensure proper use of the Games Brand including the emblem, mascot, slogan, etc. and to protect its value. Brand protection is very important to preserving the legacy, spirit, and value of the Games. Management of the Games Brand is very important for raising funds for the successful hosting of the Games.

So, you've been ambushed, now what?

Organizers and official sponsors of events for which licensed advertisers expect exclusivity will want to take steps to ensure that as little ambush marketing as possible occurs. Responding quickly to curtail the offending marketing should be the primary concern. Ideally a rapid response will minimize any potential damage to official sponsors and discourage the practice in future by likely offenders.

As such, upon becoming aware of any ambush marketing, organizers and licensed advertisers should immediately seek legal advice. There may only be a short window to mitigate the potential harm of ambush marketing, particularly in the case of limited-time events like the Olympic Games.

What to do if you have received a Cease and Desist letter

Just as organisers and sponsors can be victims of ambush marketing and must grapple with these issues, it is also possible for a company to be on the receiving end of allegations of ambush marketing.

If you or your business receive a Cease and Desist letter alleging ambush marketing, it is imperative to treat the matter seriously. In order to minimise potential difficulties, it is important to obtain expert legal advice as soon as possible. This will help to provide a full and complete assessment of your options to help you decide how to respond to the complaint.

Ambush marketing remains somewhat of a grey area and what constitutes this type of marketing is constantly changing and evolving.

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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Andrea Kroetch
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