India: Ambush Marketing: Need For Legislation In India

Introduction

Ambush Marketing is a type of marketing where one brand pays to become an official sponsor of an event and another brand, which is usually a competing brand, tries to associate itself with the same event, without paying the colossal sponsorship fees. The aim of the ambusher is to delude the customer into believing that it has an official association with the said event. Ambush marketers do not use the trademarks of third parties but rather creatively allude to an event and use their own trademarks to suggest a connection or affiliation with that event.

Ambush marketing is more prominent at sports events. A campaign by a brand at one of the big sporting leagues can get the most out of on an international crowd attending the event and the associated television audience as well. This acts as a cost effective, one stop advertising strategy for companies aiming to advertise the brand in different countries. The brands also aim at undermining the branding efforts of competing brands by stealing the attention, increasing the chaos, and confusing the viewers.1

Ambush Marketing is rightly called parasitic marketing because the competing brand tries to live off the Official Sponsor brand's goodwill and reputation by deluding the public into thinking that there is an association between the two.

Reasons for Ambush Marketing

Ambush marketing exists due to various reasons. Firstly, the sporting events only occur for a short period. When an event only lasts for 2 to 3 days, it becomes difficult for the event organisers to exercise their legal options to prohibit such activity. Secondly, the existing laws for ambush marketing are quite generic in nature and since the judicial process requires a lot of effort and is time consuming, few companies file suits against ambush marketers. Thirdly, companies are finding ways to immunise themselves against potential law suits in the future by putting up disclaimers saying that they are not the official sponsors of the event. Fourthly, there is a scarcity of case laws regarding ambush marketing and a Court's decision in favour of the ambushing company can set a precedent that could be used by every other ambushing company and hence the brands are hesitant to file lawsuits.

Some examples of ambush marketing are vague and generic advertising related to the event, flying airborne banners over the event location, advertising on billboards that are situated near the event, handing out t-shirts, caps, or other merchandise for free near the event, sponsoring individual players so that they wear the brand's name or logo during the event, or running advertisements after an event congratulating the individuals or the team.

Ambush Marketing strategies

To understand how ambush marketing works and how it comes under the purview of IP law, we need to look into the kinds of ambush marketing strategies adopted by companies.

Broadly, ambush marketing can be characterised into 3 types:2

Direct Ambushing:

When a brand intentionally wants to appear affiliated with an event for which it has no rights, directly attacking its rival and authorised brand, it is called direct ambush marketing. It is considered the most serious form of ambushing as it directly infringes upon the exclusive rights of usage of the aggrieved party. It may be through unauthorised use of symbols or other marketing elements by another/unauthorised company.

For example, Sprints Communication Co. resorted to direct ambush marketing during the 1994 FIFA Football World Cup by using the event's official logo without permission of either FIFA (Football governing body) or Master Card who were assigned the exclusive rights for using the world cup logo.3

Associative Ambushing:

It means intentional use of such terms or imagery which portrays that the company has links to the event or property, without making any reference to the official sponsorship.

Incidental Ambushing:

The efforts of a brand to gain mileage out of an event simply through heavy media spend during the event, without making any direct or indirect references to the event is incidental ambushing. It is just an attempt to distract audiences from the event's official competitive sponsor, by bombarding them with their own ads.

Ambush Marketing vis-a-vis Intellectual Property Law:

A trademark under the Trademarks Act, 1999, serves two purposes. Firstly, it protects the goodwill garnered by a particular company. Secondly, it protects consumers from deception i.e. it prevents the consumers from purchasing spurious/counterfeit goods or services in the mistaken belief that they originate from or are provided by another trader.

Therefore, any unauthorized use of any kind of logo or symbol associated with any event, will be a case of trademark infringement.

One of the notable instances is the case of Arsenal Football Club Plc vs. Matthew Reed.4 In this case, Arsenal Football club was the registered proprietor of trademark for the word ARSENAL and the ARSENAL Cannon Device among other things. Matthew Reed was selling souvenirs and club merchandise bearing these registered trademarks without a license from the football club. The Club brought an action against Matthew Reed for trademark infringement and passing off. Arsenal lost on passing off (essentially because they had not submitted any evidence of confusion). Mr Reed's defence to the claim for trade mark infringement was that his use of the Arsenal Marks did not amount to "trade mark use" or use indicating trade origin but merely as badges of allegiance. The European Court of justice ruled in favour of Reed. Arsenal appealed and the Court of Appeal rightly rejected Reed's contentions and ruled in favour of Arsenal.

Copyright infringement is caused when there is a commercial use of rights, benefits and privileges without authorization, explicit attempt to associate with an event without having a license, use of words, symbols or pictorials confusingly and deceptively similar to the event etc.

Probably the only case law that has addressed the contours of ambush marketing will have to be National Hockey League (NHL) et al v. Pepsi-Cola Ltd5. In this case, the National Hockey Services League, the licensing arm of NHL had entered into a contract with Coca- Cola to be the official sponsor of the NHL in 1989. Coca Cola, therefore, obtained the rights to use NHL symbols for its promotional events in Canada and USA. Through this agreement, however, Coke did not obtain "any right to advertise during the broadcast, in Canada of any televised NHL games." The NHL, not the NHLS, controlled such television rights and it sold them to Molson Breweries of Canada Ltd. (Molson) in 1988 for a five-year period. Molson Breweries, in turn, sold them to Coca- Cola's main competitor Pepsi-Cola. After that, Pepsi launched a television advertising campaign, that without using the NHL symbols or logos, promoted a hockey related contest. In deciding the case, the court noted that although the advertising done by Pepsi is aggressive, it is not unlawful according to the laws of Canada. The court noted that the NHL was, to some extent, the author of its own misfortune since its sale of the broadcast rights did not protect its official sponsor. Thus, the court found that Pepsi was not in violation of Coke's contract nor did its aggressive advertising campaign amount to the tort of passing-off under Canadian law or infringement on registered trademarks. However, this decision supports those seeking to ambush, because it widely opens the doors for ambushers as long as trademark and trade name infringement is not a part of the campaign.

The Indian Scenario

In India, there is almost no protection against indirect ambush marketing. In the case of ICC Development International Ltd v Arvee Enterprises and Anr.,6 ICC Development (International) Ltd had filed a suit for injunction pleading that the plaintiff company was formed by the members of International Cricket Council to own and control all its commercial rights including media, sponsorship and other intellectual property rights relating to the ICC events. ICCDIL was the organizer of ICC World Cup to be held in South Africa, Zimbabwe and Kenya from February 8, 2003 to March 23, 2003. The plaintiff had created a distinct 'logo' and a 'mascot' for the event. Owing to wide publicity of the said logo and mascot, members of the public associated the same exclusively with the mascot. It had filed applications for registration of its trade-mark in several countries. In India, it had filed applications for registration of words "ICC Cricket World Cup South Africa 2003" and logo and the mascot "Dazzler". It was pleaded that ICC events had acquired a "persona" or "identity" of their own. The official sponsors of the World Cup were : (i) Pepsi, (ii) Hero Honda, (iii) LG Electronics, (iv) South African Airways, (v) Hutch-Orange, (vi) Standard Bank-South Africa (vii) Toyota- South Africa (viii) South African Breweries (ix) MTN.

Arvee Enterprises was the authorised dealer for sale and service of electronic goods manufactured by the second defendant-Philips India Ltd. They were misrepresenting their association with the plaintiff and the World Cup, by advertisements in media, including newspapers, television, internet and magazines and by using said offending slogans with the intention to unlawfully derive commercial benefit of association with the plaintiff and the World Cup thereby, seeking to piggyback on the reputation of the plaintiff.

The Court rejected the application on the grounds that the logo of ICC had not been misused and hence there was no scope of any assumption amongst the purchasers of the defendants' goods that there was any connection between the defendants and the official sponsors of the events.

However, in the case of ICC Development vs. EGSS, injunction was granted against the misuse of the ICC logo by the defendants. The logo was held to be an artistic work under the Indian Copyright Act.

Hence, it becomes very clear that the current intellectual property regime is only partially suited to combat ambush marketing and therefore, there is a serious need for legislation in India.

Need for Legislation in India

Ambush marketing is a questionable and unethical marketing tactic used by companies who are unwilling to pay the colossal fees to be the official sponsor of an event. Brand managers are willing to ambush market on the grounds that it is considered a modest way to draw attention to their products without having to make huge investments for the same. In the event that such advertisers are not kept in check, and allowed to proceed, it sets a bad precedent for other such companies. In the event that ambush marketing is allowed to happen, it demotivates other official sponsors to pay the colossal sponsorship fees. Therefore, ambush marketing cannot be simply seen as an opportunistic marketing technique. It needs to be perceived in law to empower aggrieved parties to bring about legal action against such companies who practice Ambush Marketing. 7

At the outset, it can be seen from the aforementioned relationship to IPR that ambush marketing infringes trademark, copyright as well as design rights. Therefore, the aggrieved parties have to take recourse to some form of IPR to prove that there has been violation of some statutory provision. Some of the actions that can be brought against Ambush Marketers are:

  1. Passing off- It is a non-statutory mechanism available to parties under the IP law. In order to have a legitimate claim of passing off, the aggrieved party would have to show that i) it has an established reputation or goodwill, ii) the third party has made a misrepresentation to the public by way of marketing leading the the public to believe that it is in some way connected to the even and, iii) the aggrieved party has suffered or is likely to suffer damages a result of such misrepresentation.
  2. Trademark infringement- If the aggrieved has a registered trademark and that registered trademark or a similar mark is being used by an unauthorised sponsor, the aggrieved party can initiate trademark infringement proceedings under Section 29 of the Trademarks Act, 1999.
  3. Copyright infringement- If the aggrieved party has a particular logo, symbol, tagline or quotation in connection with a specific event, the logo maybe sufficiently original to attract copyright. If there is any unauthorised replication of the logo, symbol, tagline or quotation, then the aggrieved party can initiate proceedings under Section 51 of the Indian Copyright Act, 1957.

In absence of legislation, it becomes difficult for Plaintiffs to file a suit against such ambush marketers. There is a strong need to establish a law on the same or in the very least amend the existing laws to incorporate Ambush Marketing as an offence.

However, in the absence of such legislations it is advisable for event organisers to curtail the practice of ambush marketing by drawing up private contracts between themselves and sponsors consisting of anti-ambush marketing clauses.

In the event that the Legislature begins to frame a law against Ambush Marketing, they can incorporate the following guidelines:

  1. Restriction on the use of expressions closely associated with the event. For example, in the context of the ICC World Cup, following expressions should be restricted- a) ICC b) World Cup c) World Cup Games. These expressions would be protected and no one other than the official sponsor should be allowed to use the expression for commercial purposes. However, if the official sponsor has licensed out the same, the licensed user maybe permitted to do so in accordance with the terms and conditions of the license.
  2. Bestowing of ownership of copyright and design of the event logo on the organisers.
  3. No person in connection with the sponsored event shall make, publish or display any false or misleading statements, communications or advertisement which represents or implies a connection with the event and the person sponsoring the event.

Footnotes

1 Teresa Scassa, Ambush Marketing and the Right of Association: Clamping Down on References to That Big Event With All the Athletes in a Couple of Years, Journal of Sports Management 2011,254

2 Ms.Charul Agrawal, Ms.Jyoti Byahatti, Reengineering of Indian economy-Opportunities and challenges, Asia Pacific Journal of Research, Vol 3, October 2013

4 Case C-206/01 ECJ 12/11/2002

5 92 DLR 4th 349

6 (2003) 26 PTC 245(DEL)

7 Sudipta Bhatacharjee, Ambush Marketing-Problem and Projected Solutions- Global perspective, Journal of Intellectual Property Rights, Sept 2003

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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