Most Read Contributor in South Africa, September 2016
Companies that are not official sponsors of a commercial or
sporting occasion may face legal proceedings if they attempt to
leverage their brands off the event.
Furthermore, although ambush marketing stunts are often
entertaining and well-received by the public, they can result in a
loss of revenue for many projects and organisations that are
dependent on commercial sponsorship for their survival, and may
impact negatively on local and national development, particularly
where an event's viability hinges on sponsorship.
This is according to Lauren Frizelle, Associate at
ENS' IP Department, who says that ambush marketing is
a fairly common occurrence, characterised by companies, that are
not official sponsors of an event, trying to create an association
between their brands and products and the event, often by using the
name, logo or imagery of that event, She says that in spite of very
dedicated efforts by London officials to prevent ambush marketing,
a few enterprising marketers managed to surreptitiously solicit
their brands to the world (although in some cases, it was debatable
whether the person responsible even realised that they were
infringing on the rights of official sponsors, or doing anything
wrong). She says that many people do not realise the extent of the
commercial damage that these kinds of infringements can have.
"Companies invest vast sums of money in sponsoring an
event, team or individual. When ambush marketing occurs, it can
impact detrimentally on the exposure generated for the official
brand, the goodwill gained by the brand and the official sponsor,
and may ultimately detract from the revenue received by the
sponsor, who has invested resources in order to reap the benefits
of his brand being associated with the event. This can lead to
further loss of revenue for projects that are dependent on the
sponsor, and may also spell the end of the event itself, as
companies withdraw their sponsorship and potential sponsors shy
away from the event," she explains.
Frizelle says that the ASA Sponsorship Code recognises that
without sponsorship, many disciplines would face extreme
difficulties and, possibly, extinction, and that various pieces of
legislation exist to stem the tide of ambush marketing in its
different forms. One such example is Section 15A of the Merchandise
Marks Act, enacted to prevent non-sponsors from ambush marketing in
ways that don't necessarily involve the use of the name, logo
or imagery of a protected event, for example by selling their wares
in close proximity to the event venue on the day of the event or
days leading up to the event, or by having a plane with a branded
banner fly over the stadium.
"According to the Merchandise Marks Act, it is unlawful for
a non-sponsor to associate its brand with a protected event, or
even allude to a protected event."
She cites the 2010 FIFA World Cup, which was declared a
protected event. The host cities duly passed regulations to enforce
the relevant legislation by creating exclusion zones outside the
stadiums and along the major routes to prevent sellers from
profiting from the event. Nonsponsors of the event were not
permitted to promote or sell their goods in these zones.
"Although no further events have been declared protected
events under the Merchandise Marks Act, the restrictions relating
to the basic form of ambush marketing – using an
event's branding or something similar – are
unchanged," Frizelle says.
She explains that if an event's branding is registered as a
trade mark and ambush marketing occurs through the use of the
branding in connection with the ambush marketer's products
there will be a trademark infringement. This does not mean that
marketers can ambush unregistered trademarks, logos and so forth
with impunity, however. "If an event's branding isn't
registered but has become recognisable to the extent that people
would assume that there is a sponsorship deal or some other
business relationship between the company and the event, there will
be 'passing off'. Passing-off is a form of unlawful
competition which occurs where a company misrepresents his business
or products as being those of another company, or associated with
another company, when this is not the case..
She says that if any organisation, product or brand tries to
affiliate itself with an event or activity without being an
official sponsor of that event or activity, they are likely to find
themselves in hot water.
"Ambush marketing is something that needs to be carefully
considered, and any company that is thinking of employing this
tactic should seek legal advice beforehand," Frizelle
Originally published in Adfocus, August 23, 2012
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