SECOND tOPIC tECHNOLOGY AND THE lAW

 

Hypothetical Situation:

Use of competing trademarks in sponsored sporting event, e.g. FIBA. If the event is sponsored by Brand A, and a non sponsor brand gives out tickets to such event, with the recipients of such tickets are expected to wear the brand (trade mark or trade name) for brand exposure.

 

When sporting events are conducted, trademark owners bid for the exclusive sponsorship in favor of their brand. Normally these owners acquires the right to advertise their brands to the exclusion of others in the event.  Without Question, Certain prohibitions are implemented.  Normally, The Sponsors prohibits the introduction or bringing inside the sporting event other products which are not exclusively owned by the sponsoring brands or companies.

In a sporting event like FIBA, which is an international sporting event requires a massive investment to acquire exclusive sponsorship. By the time the contract between the trademark owner and the officers of the sporting event is perfected, there would be certain provisions or stipulations comprising preferences and privileges conferred because of such exclusive sponsorship.

If a competitor brand which is not a sponsor gives out tickets to the public in exchange for  a consideration which is to wear the brand or trademark of the non sponsoring company for brand exposure, That can be construed as indirectly advertising their products to the prejudice of the exclusive sponsors. This strategy of the non sponsor Company is called Ambush marketing.

Ambush marketing is defined as a marketing strategy wherein the advertisers associate themselves with, and therefore capitalize on a particular event without paying any sponsorship. The word “ambush” as used in the expression ambush marketing, means “an attack from a hidden position” and is derived from the old French verb embuschier, having the meaning “to place in a wood.” The term “ambush marketing” was coined by marketing strategist Jerry Welsh, while he was working as the manager of global marketing efforts for the American Express Company in the 1980s.

 Here are some International examples of situations for a better understanding of the term Ambush Marketing.

The Quebecbased home improvement chain Rona ambushed an advertisement in the “Nano-chromatic” campaign for the Ipod Nanoby placing a banner under it showing the paint dripping from the iPods falling into paint cans, advertising its paint recycling services.

During a game at the 2006 FIFA World Cup fans were asked to remove “Leeowenhosen” colored in the orange of the Netherlands football team, distributed and branded by Bavaria Brewery because the brewery was not an official sponsor of the event (Budweiser was the official beer sponsor). Officials distributed orange-colored shorts to fans affected by the requirement. Bavaria Brewery was again accused of ambush marketing at the 2020 FIFA World Cup, when 36 female fans were ejected from a game (along with the arrest of two,  later released, accused of violating the “Contravention of Merchandise Marks Act”, a law passed in South Africa for the World Cup making ambush marketing illegal) for wearing unbranded orange miniskirts that were provided by Bavaria; Sylvie Van Der Vaart, wife of Dutch player Rafael van Der Vaarthad modeled one of the miniskirts in an advertising campaign for the brewery. ITV media pundit Robbie Earlewas fired from his role when it was claimed by FIFA that he had sold tickets meant for family and friends on to Bavaria.

Also at the 2010 FIFA World Cup, South African budget airline Kulula pulled an advertisement that FIFA claimed was creating an unauthorized association with the tournament. The advertisement had described themselves as “Unofficial National Carrier of the You-Know-What” and contained images of stadiums, vuvuzelas and national flags, symbols which FIFA claimed were considered ambush marketing when used together. Kulula poked fun at the objections in subsequent ads, one which deliberately mislabeled the items from the first ad and claiming the ad was for something “not next year, not last year, but somewhere in between.” In a related stunt, Kulula announced it would offer free flights to anyone sharing the name of the current FIFA president Sepp Blatter. The offer was redeemed for a Boston Terrier dog. In October 2011, samsung ambushed the Australian launch of the Iphone 4S by setting up pop-up store near Sydney’s Apple Store; where it sold its flagship Galaxy S2smartphone to the first 10 people in line daily at a discount price of $2 AUD.

 

There are several types of ambush marketing and are Categorized as Direct, Indirect, and Incidental Ambush Marketing.

 

The Direct ambush marketing are as follows;

 

1.      “Predatory” ambushing: Intentional false claims to official sponsorship by a non-sponsor and/or intentional false denial by a non-sponsor concerning a market competitor’s official sponsorship, in each case with the intent to confuse consumers and gain market share from the competing official sponsor.

2.      “Coattail” ambushing: The attempt by a brand to directly associate itself with a property or event by “playing up” a connection that is legitimate but does not involve financial sponsorship.

3.      Ambushing via trademark/likeness infringement: The intentional unauthorized use of protected intellectual property. Such properties can include the logos of teams or events, or making use of unauthorized references to tournaments, teams or athletes, words and symbols.

4.      Ambushing “by degree”: Marketing activities by an official sponsor above and beyond what has been agreed on in the sponsorship contract. For example, an “ambush by degree” of a sports event may involve a sponsor’s handing out free promotional T-shirts without the permission of the sports league supervising the event. That sponsor may have already covered the stadium with its signs, or the sports league or participating teams may have made an earlier agreement – perhaps even an exclusive one – to let a different sponsor hand out shirts. In either case, ambush by degree clutters the available marketing space; takes advantage of the participating teams and supervising league to a greater extent than they permitted; and dilutes the brand exposure of official sponsors, including the other promotional efforts of the ambushing company (hence the alternative term “self-ambushing”).

 

On the other hand, Indirect ambush marketing are as follows;

 

1.      Ambushing “by association”: The use of imagery or terminology not protected by intellectual-property laws to create an illusion that an organization has links to a sporting event or property — This form differs from direct “coattail” ambushing in that there exists no legitimate connection between the event/property and from direct ambush by infringement in that the sponsored event/property has no property rights in the images and/or words that create the illusion.

2.      Values-based ambushing: Tailoring by a non-sponsor of its marketing practices to appeal to the same values or involve the same themes as do the event and/or its promotion, such that audiences attracted to the event or its marketing will likewise be attracted to the non-sponsor’s marketing — Essentially a reversal from “push” to “pull” of the causal processes through which direct “coattail ambushers” create sponsor/event-unapproved mental association with their products, this form of ambushing differs from “ambushing by association” in that the ambushing business begins by observing the event’s promotional scheme and drawing inferences as to its existing thematic content, as opposed to observing the event’s audience and creating new thematic content in hopes that consumers will associate the event with the thematic content created.

3.      Ambushing “by distraction”: Setting up a promotional presence at or near an event, albeit without making specific reference to the event itself, its imagery, or its themes, in order to take advantage of the general public’s attention toward the event and the audience members’ awareness of their surroundings. This form of ambush amounts to free riding upon the positive externality that the event creates for the surrounding area by anchoring public and individual attention there.

4.      “Insurgent” ambushing: The use of surprise street-style promotions (blitz marketing) at an event or near enough to it that the ambushing business can identify and target audience members. The “active” version of “passive” ambushing by distraction, insurgent ambushing not only takes advantage of positive externalities but creates negative externalities by intruding upon attendees’ experiences of the event and detracting from those experiences’ quality

5.      “Parallel property” ambushing: The creation or sponsorship of an event or property that bears qualitative similarity to the ambush target and competes with it for the public’s attention. An application of “ambushing by distraction” in which the ambusher-marketed product is the event/property itself, parallel-property ambushing does not intrude upon the experience of audience members (who remain free to attend whichever event or patronize whichever property they deem more attractive), but it does divert audience dollars and attendance figures from the preexisting event/property, interfering with the efforts of that event’s/property’s financial backers to recover their largely fixed production costs.

 

Lastly, Incidental ambush marketing are as follows;

 

1.      Unintentional ambushing: It is possible for media coverage to make passing mention of, e.g., the manufacturer of an athlete’s equipment/clothing or the provider of a service used by the event’s technical staff or in-person audience. Although in most cases most members of an event’s mass-media audience will not infer that the mentioned business is an official sponsor of the event, such that the mention is harmless “free publicity” for the non-sponsoring business, it is possible that some broadcast-audience members will at some point draw some inference of official sponsorship.

2.      “Saturation” ambushing: “Saturation ambushers” increase their broadcast-media advertising and marketing at the time of an event but make no reference to the event itself and avoid any associative imagery or suggestion. Essentially a form of “ambushing by distraction” attenuated by the absence of advertisers’ physical proximity to the event and their resulting lack of contact with in-person audience members, saturation ambushing merely capitalizes on the increased broadcast media attention and television audiences surrounding the event.

 

 

 

Jurisprudence

Ambush marketing practices have arisen in the United States, Canada, Ireland, Australia, Germany and other countries. Nonetheless, there is precious little in the way of jurisprudence internationally. This article will highlight some of the various practices that have been observed and will suggest certain approaches that can help anticipate ambush marketing and blunt much of the negative impact that can result from such conduct. To illustrate these points, the article will also discuss some of the principal decisions by the courts.

The best way to appreciate the subtlety and potential of ambush marketing is to discuss specifics. There are many who will recall the build-up to the 1994 Winter Olympics in Lillehammer, Norway. Visa, one of the official sponsors, aired television advertisements which, in addition to prominently featuring the Olympic logo, highlighted the message that American Express cards were not accepted in the Olympic Village. American Express was not a sponsor. Nevertheless, in response to Visa, it aired television advertisements which explained that American Express cards were accepted throughout Norway and featured a tagline stating that American travelers did not need a visa to go to Norway. Because American travelers did not need visas to travel to Norway, the American Express statement was quite accurate. But the clever double entendre left unanswered the question of whether viewers of the American Express advertisements mistakenly believed that American Express was a sponsor of the Olympic Games or was somehow affiliated with the Games. If such confusion was, in fact, proven to exist, then this might have been actionable conduct, at least under US law.

But not all ambush marketing is actionable. Indeed, the ambush can arise in a variety of differing contexts. For example, a promotion may be offered by a manufacturer stating that in honor of the World Cup football matches, a donation will be made to US Junior Soccer for every product purchased from that company. If the promotional materials truthfully refer to the event but do not display the official logos or give undue emphasis to the event, such a promotion, in and of itself, would probably not comprise actionable conduct.

Contrast this with an incident in which an official sponsor had been awarded (at substantial cost) an exclusive 1994 World Cup sponsorship in a broad category. In connection with its sponsorship of the 1994 World Cup, MasterCard received the exclusive right before and during the competition to use World Cup logos on, and in association with, all card-based payment and account access devices. Sprint Communications was also involved as a backer of World Cup as an official partner, a category that was neither as extensive as that of a sponsor nor as costly.

Sprint exclusivity was in the field of long distance telecommunications. Sprint began marketing pre-paid telephone calling cards both in the US and Europe bearing World Cup logos, despite MasterCard strong objection. In the litigation that ensued in the Federal Court in New York City, MasterCard established that Sprint use of World Cup logos on its telephone cards infringed on MasterCard category of card-based payment and account access devices, even though the telephone cards were not functionally the same as MasterCards. The Court held that consumers would, on seeing the Sprint card bearing a World Cup logo mistakenly assume that Sprint had rights in a category that, in fact, belonged exclusively to MasterCard. This case, MasterCard International Incorporated v Sprint Communications Co v ISL Football AG, 30 USPQ 2d 1963 (SDNY 1994); 23 F3d 397 (2d Cir. 1994), is one of the rare decisions where ambush marketing was the subject of a court injunction.

Commercial sponsorship is big business. Some estimate that sponsorship rights for the 1988 Olympics, held in Seoul, South Korea, yielded about $338 million in sponsorship fees. To say that this is a growth industry would be a gross understatement. Indeed, it has been estimated that the total sponsorship for the 1992 Olympic Games, which took place in Barcelona, was worth approximately $700 million. A sum almost double the sponsorship fees for the same event just four years earlier.

Why would companies wish to spend such princely sums? The obvious rationale for underwriting such sponsorships is to achieve audience awareness and image enhancement. This sponsorship role permits marketing communicators to talk more directly to particular market segments in a manner that may be more efficient and less costly than traditional media advertising.

Not surprisingly, such high-visibility marketing, promotional and advertising opportunities attract aggressive competitors intent on creating their own association with the event. Ambush marketing is a phrase that describes the actions of companies who seek to associate themselves with a sponsored event without paying the requisite fee. The ambush consists of giving the impression (sometimes false, sometimes not) to consumers that the ambusher is actually a sponsor or is somehow affiliated with the event.

 

Ambush marketing can provide some, if not most, of the benefits of a legitimate, paid-for sponsorship at relatively little cost. The danger, of course, is that such marketing may have the propensity to cause confusion among consumers or otherwise to impact negatively on the sponsorship rights. Indeed, depending on the nature of the ambush, it can violate the law. For example, in the United States, such marketing practices can violate the Lanham Act (typically, Section 43(a)) if, for example, they convey the false message that a company is an official sponsor or affiliate when, in fact, it is not. Such conduct can also raise issues of unfair competition, breach of contract, tortuous interference with contractual relations and tortous interference with prospective business advantage. In certain instances it could conceivably raise questions of prima facie tort and violation of the states various little FTC acts, often codified as the Uniform Deceptive Trade Practices Act.

 

In the Philippines, Section 169 of the Intellectual Property Code provides that, False Designations of Origin; False Description or Representation.

·         169.1. Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.

 

Though it would be absurd to sanction people on what they wear especially in a sporting event where hundreds or even thousands of fans are watching, it would be in line with fair play to prevent those people who are there because of a condition to advertise other brands indirectly. As long as it is manifest that the purpose of wearing competing brand in the sponsored sporting event is advertisement, then it would be just to prevent such advertisement.

Nowadays, many people are aware on how businesses are conducted and how they are protected. People assume that when they see something inside an event, these marks, brands or trade names are the official sponsor of such event. People may come to know it because of signboards, logos, stickers, monitors, commercials, outfit of the employees, etc., so if a competitor brand will be allowed to advertise their products by letting some fans or audience to wear their products, it may cause confusion or a state of mind that the competitor brand is also a sponsor of the sporting event.

These kinds of acts and tactics by the other brands should be regulated. Sponsors spend a considerable amount just to have their trademarks or brands advertised. To allow them to indirectly pursue these kind of acts will prejudice the exclusive owner and thus render nugatory the exclusive sponsorship and advertisements of its products.

 

But how should these exclusive sponsors deal with these people who are indirectly advertising other competitor’s brands? The Philippine law provides for a civil action for damages and for an injunction. Section 169 of the intellectual property code of the Philippines provide that these violators, shall be liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she is or is likely to be damaged by such act. If the act was manifestly done to advertise the competitor brand with knowledge that the sporting event has its exclusive sponsor, a civil action for damages may be filed against the non-sponsor brand.

 

Regulation and Remedies:

 

·         168.1. A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights.

·         168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefore.

·         168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose.

Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.

 

In response to the Topic given for the students of Technology and the Law, the act of the non-sponsors may be deemed to be an act of unfair competition. This is obviously a case of Ambush marketing. The increasing cost of sponsorships has also increased sponsor’s emphasis on return-on-investment. If sponsored events do not give exclusivity, the sponsor’s interest on sponsorship property will be lost and the damage will extend to the whole sponsorship market. Yet when that exclusivity is lost, the value of sponsorship is also lost. When a company engages in ambush marketing the exclusivity intended to be conferred through sponsorship to a sponsor is lost. Hence, the value of sponsorship is also lost. As it is an undeniable fact that corporate sponsorship is one of the biggest money-spinning sources of revenue for the event organizers, the loss in sponsorship value will affect the financial strength of an event organizer.

With regard to the transgression on the intellectual property rights, Even when the ambush marketers are not making any direct references to the protected intellectual property rights, they in effect transgress those intellectual property rights by attempting to capitalize on such hard earned goodwill from an event. Direct and indirect references to the event symbol or the event itself are just different means for achieving illegal transgression on the rights of event organizers. Moreover, sponsors cannot get the return they anticipated.

 

References:

 

1.      ^ Jacqueline A. Leimer, ‘Ambush Marketing: Not Just an Olympic-Sized Proglem’, 2(4) Intell. Prop. Strategist 1, 3(1996).

2.      ^ abhttp://www.macmillandictionary.com/New-Words/050815-ambush-marketing.htm

3.      ^ J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, Fourth Edition

4.      ^ Lori L. Bean, ‘Ambush Marketing: Sports Sponsorship Confusion and the Lanham Act’, 75 BUL Rev. 1099, 1100(1995).

5.      ^http://www.poolonline.com/bios/biojwelsh.html

6.      ^ Simon Chadwick and Nicholas Burton, “New Definitions for Ambush Marketing”, The Wall Street Journal (WSJ.com) – Business News & Financial News, 2010 October 20, available at http://online.wsj.com/article/SB10001424052970204731804574391102699362862.html.

7.      ^ ab“Ingenious Ambush Campaigns From Nike, Samsung and BMW Make Official Sponsorships Look Like A Waste”. Business Insider. Retrieved 18 August 2012. 

8.      ^“Dutch fans given shorts for match”. BBC News. 21 June 2006. Retrieved 7 May 2010. 

9.      ^ Gibson, Owen (16 June 2010). “World Cup 2010: Women arrested over ‘ambush marketing’ freed on bail”. The Guardian (London). 

10.  ^ Kelly, Jon (17 June 2010). “How ambush marketing ambushed sport”. BBC News Magazine (BBC). Retrieved 2010-06-21. 

11.  ^http://news.sky.com/skynews/Home/UK-News/World-Cup-2010-Robbie-Earle-Sacked-By-ITV-Over-Holland-v-Denmark-Ticket-Claims/Article/201006315649566?lpos=UK_News_First_Buisness_Article_Teaser_Region_0&lid=ARTICLE_15649566_World_Cup_2010%3A_Robbie_Earle_Sacked_By_ITV_Over_Holland_v_Denmark_Ticket_Claims

12.  ^“Robbie Earle sacked over World Cup tickets”. BBC News. 16 June 2010. Retrieved 16 June 2010. 

13.  ^“Fifa orders SA airline to pull ad”. BBC News. 19 March 2010. 

14.  ^“Samsung plays dirty, ambushes Apple’s iPhone 4S launch in Sydney”. The NExt Web. Retrieved 18 August 2012. 

15.  ^“A Torchbearer’s Commercial Coup”. The Wall Street Journal. Retrieved 18 August 2012. 

16.  ^ ab“London 2012 Olympics: Paddy Power seek a court order after Locog demand advertising posters be taken down”. Telegraph. Retrieved 18 August 2012. 

17.  ^“LOCOG U-turns over Paddy Power ‘London’ ads”. Marketing Magazine. Retrieved 18 August 2012. 

18.  ^http://www.hgf.com/uploads/Online%20Ambush%20Marketing%20and%20London%202012.pdf

19.  ^http://www.languagemonitor.com/olympics/olympic-ambush-marketers-continue-to-dominate-london-2012/Olympic Ambush Marketers Continue to Dominate London 2012

20.  ^London 2012 Olympics Doing Its Best To Ambush Ambush Marketers

21.  Baker Botts L.L.P. Newsroom Resources Ambush Marketing and How to AvoidIt.html

 

22.  Intellectual property Code of the Philippines

 

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