Ambushed!

6th August, 2012 - 8:09 am Categories: IP Litigation 0 Comments

India may be a cricket crazy nation but it is the Olympics that has every Indian clinging on to his television set these days, cheering for his country. The Olympics is one of the biggest sporting events in the world where more than 200 nations participate in nearly 400 events. The media exposure became a lucrative business and since it is held once in four years, it is a tussle between brand owners to sponsor this major international event. In the extraordinary growth of sponsorship over the last decade, there is a raging competition between companies to secure and protect their hard-earned sponsorship rights. With this respect, there is a rise in ambush marketing which is the biggest menace when it comes to sponsorship.

Sandler and Shani (1989) were among the first to discuss ambush marketing. They suggested that ‘ambush marketing’ occurred when a non-sponsor of an event attempted to pass itself off as an official sponsor. 

In short, a particular sponsor pays millions of dollars for their brand to grab the spotlight in a major event, and a non-sponsor tries to encash in their glory, by not paying anything, but by freely presenting their brand as another sponsor of the event. In return for the fees, the real sponsor gets exclusive advertising space in the form of billboards, ad campaigns and other promotional gear in the form of T-shirts, bottles, food and drink. Now, rival companies manufacturing the same product, will both not win sponsorship rights for a particular event, hence ambush marketing steps in. It does not weasel its way simply into sporting events; it comes into play in any major international event.

There are two views on whether this is legal or not. Brand owners have taken the stand that it is illegal since it is a burgeoning threat to their own brand. The public on seeing both the brands would naturally assume both of them to be the official sponsors. To determine its legality, it has to be seen whether the impact of passing off is subtle or a complete rip-off.  Let us look at when ambush marketing started first:

In 1984, for the first time, the International Olympics Committee (IOC) presented the first Olympics that did not need public funding. Hence, profitable sponsorship contracts were offered to potential brands for this mammoth event. Fuji won the race against Kodak for the rights to be an official sponsor of the 1984 Olympics. In a backlash, Kodak broadcasted several advertisement campaigns and promotional products during the games. Naturally, the public would be deceived into assuming Kodak and Fuji were both sponsors.

Unfortunately, Fuji could do nothing about it since the laws were very loose in terms of ambush marketing. Kodak had actually gone by what was written in the law. The sloppy mistake was on part of Fuji; nothing in their sponsorship contract guaranteed that no competitor or rival’s advertisements would run during the Olympic games.

In 1988, the tussle between Kodak and Fuji resumed. Kodak secured the worldwide category sponsorship for that year’s Olympic Games, while Fuji had won the sponsorship of the U.S. swimming team. Both the brands aggressively marketed their products. But here, the IOC determined that Kodak was the official sponsor and Fuji was usurping them. Fuji had all the legal rights to ensure their sponsorship in a sub-event, if not the main event, hence their marketing strategies were justified. But it was obvious on the part of the IOC to protect its own revenue streams than it would care to protect its sponsor’s rights. It is pertinent to note that 40% of the IOC’s revenue streams comes from sponsorship fees.

In another famous instance, American Express Co. displayed advertisement campaigns in 1992 with scenes from Barcelona, Spain which was the host for the 1992 Summer Olympics, along with a message “You don’t need a visa to visit Spain”. Visa Inc., the official sponsors of the event, claimed that American Express was trying to ambush Visa. American Express safely said that the commercials did not refer to Olympics so they never ambushed Visa. This was a subtle form of ambushing which was perfectly legal in the eyes of law.

India has also been a victim to ambush marketing. There was an instance of 1996 cricket world cup where Coca Cola was the official sponsor but its sponsorship was clearly overshadowed and ambushed by the cheeky and catchy slogan “nothing official about it” of Pepsi. Again in 2003, the Indian cricket team nearly boycotted the Champions Trophy as they took a stand that they could not participate in accordance with the strict International Cricket Council (ICC) sponsorship rules as they went against their individual contracts with other sponsors.

Such cases would make you feel that it is only the sponsors, prospective sponsors and event owners at stake, but we find instances where even the competing athletes and fans are at stake. In 1992, when Michael Jordan accepted his Olympic medal on the podium, he had to drape a towel over the Adidas brand to satisfy his individual contract with Nike. Despite Adidas being the official sponsor, Nike had made this move to protect its individual association with Jordon. With respect to the fans, in the 2006 FIFA World Cup, the brewer Bavaria gave away their branded lederhosen to Dutch fans travelling to Germany for the game which was officially sponsored by the competing brewer Anheuser Busch. When the fans unwittingly arrived, wearing this branded merchandise, the officials forced the fans to remove their lederhosen and watch the game in their underclothes, which caused great inconvenience to the fans who only became an innocent victim. The irony is that even though the fans later on found out that Bavaria was not the official sponsor, because of the magnitude of this incident, they would always continue to associate the product with both Bavaria and Anheuser Busch.

Law in India

At present, India has not enacted specific anti-ambush marketing laws. The Indian courts seek redress from the Trade Marks Act, 1999 and the Copyright Act, 1957.

The Copyright Act, 1957 states that a copyright in a work is deemed to be infringed when any person, without a license granted by the owner of the copyright does anything, which is the exclusive right to do, conferred by the Act upon the owner of the copyright. The alleged infringement should resemble the original in a large measure and it must be derived from the original copyrighted work. In this perspective, the ‘lay observer’ test is to be relied on under which, it states that it if there was no appearance of reproduction, then there is no infringement of copyright in the particular work which is under the scanner.

In the case of ICC Development v. Evergreen Service Station, (2003) 26 PTC 228, the Delhi High Court granted an injunction preventing the defendants from using the logo of ‘ICC World Cup 2003’ consisting of black & white strips and the mascot ‘Dazzler’, and held it to be an artistic work under Section 2( c) of the Copyright Act, 1957.

Further, the Trade Mark Act, 1999 provides privileges to a registered trademark of the title, right to use and the right to obtain relief in the case of an infringing mark. The holder of the mark needs to show that the infringing mark is deceptively similar to his own mark, to claim relief. There must be likelihood of confusion in the mind of a potential consumer.

Several measures are sought to be taken to protect a sponsor’s rights at such major events. Athletes are not allowed to bring their own food and drink in the Olympics village, as they can be photographed holding brands which are not official sponsors. In conclusion, a more stringent law must be enacted. The stake in such major international events is very staggeringly high since the event would promote tourism and develop their own economy. Hence, there is an urgent need to seek relief against ambush marketing. No brand will indulge into direct ambush marketing; it would always be a more subtle spoof or parody which would not attract any provision in the already enacted laws. It is about time that the Indian legislators recognize this urgency and implement a law against ambushers.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com