Clever Tactics Or Unfair Play? The Ambush Marketing Debate

INTRODUCTION

Indeed, ambush or parasite marketing is the act whereby a firm tries to associate with a major event or brand without getting permission from the official sponsors or the sponsors of the particular events. The idea itself is commercial, in which one brand associates itself with major events, such as sporting events, without being required to pay a sponsorship price. The aim is to form a link with the event or the attendees without permission from the primary sponsors or, suppliers, or hosts. In doing so, they are depreciating on some of the value for which the 'official' sponsors have paid a hefty price.

Instead of directly using the event's trademarks, ambush marketers come up with creative ways to hint at an association, using their branding to make it seem like they're connected to the event. This can sometimes mislead consumers into thinking the company is officially linked to the event, even though no genuine partnership exists¹.

One of the most infamous cases of ambush marketing happened during the 1996 Atlanta Olympic Games. Nike cleverly sidestepped the official sponsorship by purchasing most outdoor billboards to showcase their ads, handing out free banners to the crowd, and even setting up their own "Nike Village" right next to the official sponsors' area. As a result, many people mistakenly thought Nike sponsored the event, allowing the brand to gain significant visibility without paying the hefty US$ 50 million sponsorship fee². While the athletes were busy preparing for their competition at the Olympic Games, companies and businesses were preparing for the "intense marketing blitz" that came along with the games. Before the 1996 Olympics, it was in 1984 that even though Fujifilm was the official sponsor for television broadcasting of "games and U.S. track team," Kodak was sponsoring the same³.

Ambush marketing encompasses both positive and harmful practices. It can range from "fair competitive practices" to misleading tactics like "passing off" or "trademark infringement." However, there is a significant lack of legislation on this topic, particularly in India, which ultimately helps the defendants to evade liability. There are various ways of doing ambush marketing, which will be discussed in the later part of this blog, which hardly fit in the categories of "trademark or copyright infringement" or "passing off," and many cases fail to reach the court. This article shall delve into the need for proper legislation to tackle the intelligent tactics of ambush marketing. Legislations from various other countries shall also be looked into.

ACTIVITIES FALLING UNDER THE DOMAIN OF AMBUSH MARKETING

Broadly, the activities fall under two classes:

To begin with, activities that are "similar to Piracy."

• Such activities include the "unauthorized use of a registered event logo on products."
• Falsely claiming to be the official supplier of a team.

These clear violations of intellectual property rights have straightforward legal remedies since they involve direct infringement.

The second category of activities can be broadly sub-categorised into six types. These forms of ambush marketing are more subtle and only sometimes have straightforward legal remedies, if any at all. These could involve things like "unofficial merchandise," "publications," "promotional activities," "broadcasts," "virtual advertising," "websites," "live screenings," "videos," "photography," "telephone commentary," "information services," or "unsanctioned corporate sponsorship." Here are some specific examples:

1. Sponsoring the broadcast of an event: This works in favor of the ambush marketer since the T.V. audience is often much larger than the in-person crowd at the venue. This happened in the case of the 1996 Olympics.
2. Sponsoring smaller parts of the event: This is a cost-effective strategy where the ambush marketer sponsors just one team or aspect of the event while the official sponsor funds the whole event. It's an intelligent way to gain visibility without the massive investment. Toyota was the official sponsor of the 2018 Winter Olympics, which took place in Pyeongchang. Hyundai was the Ambush Marketers, who, instead of being the official sponsors of the 2018 Olympics, sponsored the South Korean Olympic team, and its logo was projected on the team's uniform and equipment. Moreover, the Olympic torch relay, which is a high-profile event that ultimately leads up to the games, was also sponsored by Hyundai. Using this technique, these Ambushers gained significant visibility at a fraction of the cost.

• Buying ad time around the event's T.V. broadcast involves purchasing advertising slots around the event's televised coverage. For instance, even though Qantas and Adidas weren't official sponsors of the 2000 Sydney Olympics, they bought ad spots during the "games' broadcasts." Similarly, while Budweiser was the official sponsor of the FIFA World Cup in 2018, Heineken, a competing beer brand, purchased advertising slots on T.V. networks that were engaged in broadcasting World Cup matches.

1. Running major promotions (non-sponsored) that coincide with the event: "This may involve organizing contests to send consumers to the event, placing hoarding or booths at strategic locations during the event."⁴
2. Pourage agreements: This refers to an "agreement" to buy the "rights to sell beverages at an event" or venue, often in exchange for some rebate.
3. Corporate hospitality and ticketing: This involves buying event tickets and "offering hospitality packages" without the approval of the rights holders.

These tactics allow companies to benefit from the event's popularity without officially sponsoring it.

ETHICAL AND LEGAL CONCERNS

Event sponsors provide an exclusive marketing right for their logos often in terms of millions, to associate with major events. Ambush marketers defeat this by leveraging on the event without paying the charges, a rude shock to standard-compliant sponsors. However, where the legal armoury is not well articulated, ambush marketers leverage themselves into associating with events. This weakens the value of sponsorship contracts and may lead to breaches of intellectual property rights. It also makes an uneven playing field. Companies engaging in ambush marketing gain visibility and customer engagement without bearing the cost of sponsorship, while others pay for official rights. Sponsorship revenue is usually the largest source of income used by event organizers to finance an event. Someone grabs your logo from the environment without you paying for it, and it deters you from being an official sponsor, discouraging event sponsors. If Ambush Marketing is not controlled, it has the potential to bring down the overall sponsorship concept since the brands paying for naming rights will be competing with brands without paying since they simply associate themselves with the event. It can dilute the value of an official sponsor's trademark by creating an association with an event without permission. When a non-sponsoring brand creatively associates itself with a high-profile event, it diminishes the exclusive connection that the official sponsor has paid for, weakening the brand's distinctiveness in the minds of consumers. While ambush marketers may not use the official sponsor's logo or trademark directly, they often employ subtle references that might confuse consumers. If the ambush marketing campaign misleads the public into believing there's an affiliation, it can be considered a form of trademark infringement under laws like "passing off" or unfair competition. Current laws, such as trademark protection and unfair competition, may need to cover the innovative tactics used in ambush marketing fully. Specific legislation would provide clarity and address gaps in enforcement⁵.

WHERE DOES INDIA STAND?

In India, the Delhi High Court rejected the argument that ambush marketing constituted intellectual property infringement in a case involving the International Cricket Council (I.C.C.) and Britannia during the World Cup. In another case of I.C.C. Development International Ltd (I.C.C.D.I.L.) v. Arvee⁶, it was contended by I.C.C. that Arvee had organized a contest offering World Cup tickets as prizes, using the exact "catchphrase," "I.C.C. Cricket World Cup South Africa, 2003" as the I.C.C. had registered. In contrast, the defendants had used "Philips: Diwali Manao World Cup Jao" and "Buy a Philips Audio System, win a ticket to World Cup." The I.C.C. sued Arvee for passing off and ambush marketing. However, the court did not recognize ambush marketing as a valid claim and ruled that Arvee's actions did not amount to misuse. "The Court rejected this because the logo of I.C.C. has not been misused, and hence there was no scope for any assumption amongst the purchasers of the defendants' goods that there is any connection between the defendants and the official sponsors of the event."

I.C.C. Development v. E.G.S.S.⁷, the court granted an injunction, but this was due to copyright infringement. E.G.S.S. had used the official World Cup logo, which was classified as an artistic work protected under the Indian Copyright Act, leading to the injunction. The ruling focused on misusing copyrighted material rather than ambush marketing itself.

The cases above demonstrate how the Indian Copyright Act is still nascent regarding ambush marketing and is not well suited to tackle such indirect association between any significant sporting event and any advertiser.

WHERE DO OTHER COUNTRIES STAND?

Rules regarding the concept of ambush marketing vary from state to state; a few countries have certain legislation on the issue. Here's an overview of the relevant laws:

1. South Africa:

"Section 15A of the Merchandise Marks Act of 1941" provides that no one should use any mark or logo in a manner calculated to create an impression that the proprietor is officially connected to a protected event. Event organizers can request to have their event classified as a 'protected' event, making it unlawful to associate with it.

The 2010 FIFA World Cup South Africa Special Measures Act⁸: Explicitly introduced for the 2010 FIFA World Cup, it contained strict provisions to protect official sponsors by prohibiting ambush marketing around the event. Unauthorized advertising in and around the venue was strictly controlled.

2. Australia:

Sydney 2000 Games (Indicia and Images) Protection Act, 1996⁹: Introduced for the Sydney Olympics, this act restricted the use of Olympic symbols, logos, and terms like "Olympics" or "Sydney 2000" to protect official sponsors. It specifically targeted ambush marketing by association. Even though the games are over, the Australian government has occasionally enacted similar legislation for "hallmark sporting events."

3. China

Beijing Olympic Symbols Protection Regulation, 2002¹⁰: Enacted for the 2008 Beijing Olympics, this law protected the use of "Olympic symbols" and has an "anti-ambush marketing clause."

4. England

London Olympic Games and Paralympic Games Act, 2006¹¹: This act was introduced to protect the exclusive rights of official sponsors for the 2012 London Olympics. It prohibited unauthorized advertising and trading, use of specific terms (like "London 2012"), and creating false associations with the Games. Such acts would attract fines.

WAY FORWARD

With India's growing interest in sports like football, cricket, and badminton that draw big sponsorship deals, ambush marketing is becoming a bigger problem here. But ambush marketing, which exposes official sponsors to losing the value of their investments, needs to be fully addressed by India's current legal system which at the moment is not completely addressed.

To tackle this issue, India can draw inspiration from other countries and implement a robust legal framework to safeguard the rights of official sponsors while addressing ethical concerns. Inspiration can be drawn from legislation aiming to protect event logos and make them "protected events." Cricket events like the Indian Premier League (I.P.L.) or the I.C.C. World Cup could be declared "protected events," using logos, symbols, or branding without permission would constitute an offense. India can develop a Major Events Protection Act modelled after New Zealand's Major Events Management Act, 2007 (M.E.M.A.)¹². This act could define what constitutes ambush marketing and provide remedies for ambush marketing by intrusion (such as unauthorized advertising near venues) and ambush marketing by association (creating false connections with the event). Large-scale competitions like the I.P.L., Pro Kabaddi League, or Hockey India League may be subject to this statute. Confusion regarding a brand's connection to an event is frequently the key to ambush marketing. Companies may be held accountable if they deceive the public into believing they are official sponsors due to the stringent regulations governing "passing off" and consumer confusion. India should collaborate with sports organizations like the "Board of Control for Cricket in India (B.C.C.I.)" and event organizers to ensure they develop comprehensive contracts that protect sponsors' rights. Provisions that forbid "unauthorized corporate sponsorships, unauthorized promotions, and purchase agreements" during important events may fall under this category. Ambush marketing strategies can be further deterred by placing more focus on event-specific copyright rights. Such actions will assist in maintaining the credibility of sporting events in India and guarantee that official sponsors get what they pay for.

Footnotes

1 Seth, R. (2010). Ambush marketing–Need for legislation in India.

2 Gradauskaite, J. (2010). The advertising appeal of sports and the legal limits of the incorporation of sports in advertising. ESLJ, 8, 1.

3 Supra Note 1.

4 Supra Note 1.

5 Bhattacharjee, S. (2003). Ambush marketing-The problem and the projected solutions vis-a-vis intellectual property law-A global perspective.

6 (2003) 26 PTC 245(Del).

7 (2003) 26 PTC 228 (Del).

8 The 2010 FIFA World Cup South Africa Special Measures Act.

9 Sydney 2000 Games (Indicia and Images) Protection Act, 1996.

10 Beijing Olympic Symbols Protection Regulation, 2002.

11 London Olympic Games and Paralympic Games Act, 2006.

12 Major Events Management Act, 2007

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