AMBUSH has changed over time. Originally it was a

AMBUSH MARKETING: IS THE REGULATORY APPROACH BOWING DOWN TO
LIMITLESS INGENUITY?

–         
Sanjeev Jothi

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Introduction

Ambush
marketing refers to a company’s attempt at associating itself to the popularity
of a world renowned event without the permission of the organizers.1 The
company aims to capitalize on the attention, goodwill, awareness and other
benefits that can be accrued by associating themselves or their brand to a
well-renowned event such as Olympics, and avoid having to spend a single penny
to become one of the sponsors. The definition of ambush marketing however, has
changed over time. Originally it was a brand’s attempt to associate itself with
a team or event without buying the rights so as to steal the spotlight from the
rival that paid to be an official sponsor2. Today,
increasing numbers of companies try to hitch their brands to the biggest
publicity magnets in sports without paying for rights. And they do it in all
sorts of ways, from one-off stunts to long-term campaigns; the object of which
is to go viral in the current social media hooked society. In fact this so
called, “brand wars” appears to have evolved into a marketing tool all its own.
That being said, some companies do ambush marketing as just another way to
publicize and market their goods, with no motives concerning their rivals’
activities in the same area.

Evolution of Ambush Marketing

The
term ‘ambush marketing’ was coined by Jerry Welsh, while he was working as the
manager of global marketing efforts for American Express in the 1980s.  Ambush marketing, broadly speaking is an  attempt 
by  a  third 
party  to  create 
a  direct  or indirect 
association  with  an 
event  or  its 
participants without their approval, hence denying official sponsors,
suppliers  and  partners, 
part  of  the 
commercial  value due  to 
their  ‘official’  designation3.
This association is without permission of the event organizer or its official
partners, and the desire is to deceive the consumer into believing that there
is an official association4.

Time
and again, the multinational corporation Nike has used the ambush marketing, to
make headlines without being the official sponsor. Be it in the 1992 Barcelona
Olympics when Nike got basketball star Michael Jordan to cover rival and
official sponsor’s (Reebok) logo with the US flag; or in 1996, at the Atlanta
Olympics when it got sprinter Michael Johnson, winner of the 400-metre race to
wear its famous gold-coloured shoes. Recently, in the 2012 London Olympics,
Nike released a six-minute ad, Find Your Greatness, which shows athletes
training in places called London across the world, such as London in Ohio, Norway,
South Africa, Jamaica, Nigeria, taking a
cheeky jab at not being allowed to use the name of the host country and
generating a huge buzz on social media5.

Ambush
marketers do not use the trademarks of third parties but rather creatively
allude to a sporting event and use their own trademarks to suggest a connection
or affiliation with that sporting event6. Ambush
marketing is very difficult to define, with everyone having their own views as
to whether an activity is below the belt
or commercially acceptable in a competitive market. When we get down to its
nitty-gritty, there are many kinds of ambush marketing, but broadly speaking
there is essentially into two broad classes:

·        
Activities
traditionally considered piracies – these will usually
have a clear-cut remedy in law. They are activities that clearly constitute
infringements of the property rights in an event, for example, unauthorized use
of a registered event logo on merchandise, or false claims to be official
suppliers of a particular team.

·        
Other
activities – more subtle practices for which the remedy is
less clear-cut or may not even exist7
since it is difficult to even ascertain as to whether theses break the rules.

There
are many strategies using which a company can ambush another brand through advertising,
which would fall under the ever expanding scope of ambush marketing. Some of these
may be direct and blatant, such as coattail ambushing which entails a brand
directly associating itself with a property or event by using a legitimate link
other than becoming an official sponsor of the property or event. For example,
in an over-the-top branding attempt saw Linford Christie, Olympic gold medal
sprinter, wearing contact lenses with the Puma logo during a press conference
preceding the game in Atlanta. The stunt didn’t sit too well with official
sponsor Reebok, which had paid $40 million for the exclusive rights to the
event.8
This is one of the more difficult types of ambush marketing where there is not
really much of a legal recourse that the official sponsor can take, other than
take it up with the event organizer.

To
understand, ambush marketing, it is imperative to acknowledge the reasons for
ambush marketing. There are primarily four reasons9 as
to why ambush marketing survives.

1.      Ambush
marketing campaigns are short-lived and hence legal recourse becomes difficult.

2.      Lack
of case laws.

3.      Success
achieved by corporations in defending themselves.

4.      Avoidance
of legal recourse by event organizers as they do not want to alienate future
sponsors.

The
most successful methods of ambush marketing has always been creative
advertising which though might be toeing the line of intellectual property
infringement, never makes a direct reference and hence gets away with it. Even
if the ambushed brand decides to take action, they have to ensure that they
don’t come off as the bad guy or give undue publicity as evidenced by the
Bavarian fiasco in Germany in 2006, where up to 1000 fans Dutch fans had to
watch the Argentine-Cote d’Ivoire match in underpants after being denied entry
because they were wearing the orange lederhosen – apparently given away by
Bavaria with purchases of its beer10.
This incident ended up getting more popularity merely because the authorities
decided to strip the spectators to their underwear.

 

 

Possible Remedies

There
has been a plethora of legislative measure taken by various countries to battle
ambush marketing; but due to the legal grey area in which most of ambush
marketing strategies work in, non-legal measure will be more effective. Sports
organizations are doing more to protect their investments, and those of their
sponsors. The IOC, for one, now requires broadcasters of the Games to offer
official sponsors first rights of refusal for advertising time during
programming, guarantees from host cities that legislation will be in place to tackle
ambush marketing and outdoor and public-transport advertising controlled from
two weeks before the opening ceremony until the official closing. There is also
a “binding option” to purchase all available outdoor and
public-transport ad space “in the host city and in cities having an operational
role in the staging” of the Games.11

Various
legal measures are also typically deployed in tandem with other kinds of
measures to deal with the creativeness of ambush marketers, such as special
anti-association laws. This type of legislation tends only to apply locally and
will be time-limited. For example, for London 2012, the ‘London Olympic
Association Right’ applied in the UK only and expired at the end of the Olympic
year, in Brazil the offence of ambush marketing established under in so called
‘World Cup 2014 Law’ could only be enforced until the end of 2014.12 There
is an anti-association right in respect of the 2018 FIFA World Cup for advertising
in Russia during or in connection with the World Cup, and the non-official
brands have to ensure that they don’t infringe the 2018 World Cup Law either by
associating directly or indirectly with the event or by advertising within 2 km
of stadia without authorization and complying to the other regulations.13 Finally,
event organizers may use contractual terms to seek to prevent participants in
the event (athletes, teams, officials etc) from allowing their name or image
etc to be used within advertising during the event and/or for the purposes of
ambush marketing. The trade mark protection in Russia is bolstered further by
special legislation, the Federal Law (“The 2018 World Cup Law”) of 7 June 2013 which
was signed by the President of Russia, which will help tackle any illegal
associations to the event.

The
popularity of mobile, social media and digital media marketing generally has
also opened up new fronts in the battle between rights-holders and ambush
marketers.14
In response to these new threats, rights-holders have looked to take steps to
preserve the value in their official sponsorship packages.  The US Olympic Committee, in advance of Rio
2016, went so far as to warn non-sponsors, in correspondence, that they could
not use #Rio2016 or #Team USA, share or retweet anything from official Olympic
pages or reference any Olympic results15.
But it’s questionable how effective such threats are, certainly when they
appear to extend far beyond the legal recourse which is actually available.
There are some consequences however; the Bavaria beer episode led to the South
African authorities making arrests, as well as the sacking of the TV pundit
Robbie Earle, who had apparently supplied the tickets to the girls: a media
storm ensued16.

However,
event owners could also implement other options, such as reducing the number of
sponsorship categories they sell, managing the sale of rights of broadcast
sponsorship. It is reported that over a third of respondents in their research
thought only official sponsors could advertise during an event telecast.

 

Effectiveness of Regulatory
Measures

The
need for regulation regarding ambush marketing is evident in today’s scenario,
when we take into account the amount of money spent by the top official
sponsors ($25-50 million per year). Almost every host nation has enacted new
statutes that can battle ambush marketing in the major Olympic and FIFA events
in the recent years. On analyzing some of these statutes and the actual impact
it had in stopping ambush marketing by unofficial sponsors, it is implicit that
the effectiveness of these statutes however leaves a lot to be desired.

Australia
in light of the 2000 Olympic Games enacted the Sydney 2000 Games (Indicia and
Images) Protection Act 1996 which build on and supplement existing intellectual
property rights in the area of copyright, trade mark design, passing-off and
trade practices law generally. The specific purpose of the Act was to
facilitate the raising of revenue in relation to the Sydney 2000 Games through
the regulation of the use for commercial purposes of the indicia and images
associated with the Games.

On
30 August 2000, Qantas ran a full-page advertisement headed “Australia
Wide Olympic* Sale”. The asterisk drew the conscientious reader’s
attention to a statement in small point type that “Qantas is not an
Olympic Sponsor”.  Ansett (the
official sponsor) brought proceedings in the Federal Court for an injunction to
prevent Qantas engaging in ambush marketing activities. It requested an
expedited hearing because of the proximity of the Olympics, which were to start
on 15 September.17
Although the hearing commenced, it settled after several hearing days without a
decision from the court. There seems little doubt that Qantas emerged
victorious since there was no declaration of infringing conduct or any
corrective advertising ordered. The Sydney 2000 Act was effective in preventing
the sale of unlicensed Olympic products next to official merchandise without
fluorescent disclaimers on its unlicensed merchandise18
but that could have been achieved under the Trade Practices Act. As the Qantas
case has revealed, it is unlikely that the courts will see visual
representation as a marketing tactic which, to the reasonable person in the
circumstances of the presentation, suggests a connection with the Sydney 2000
Olympic Games.

Ambush
marketing via social media, known as ‘social ambush19’
poses the most obvious threat, as it is the hardest to monitor and control. The
Brazil 2014 World Cup saw the rise of the ‘social’ ambush with numerous
companies, including Spec Savers, Snickers, Peperami, opportunistically posting
jokes related to Louis Suarez biting the shoulder of Italian player Giorgio
Chiellini.

FIFA
had already made its intentions clear prior to the start of the World Cup by
filing numerous trade mark registrations and getting the Brazilian government
to include stringent measures against ambush marketing in the Lei Geral da Copa
(the “World Cup Law”). Given that research from June 2014 indicated that nearly
40% of UK, US and Brazilian consumers wrongly believed that Nike, MasterCard
and Pepsi were official World Cup sponsors20,
FIFA’s concerns could perhaps be seen as somewhat understandable. Nike’s advertising
campaign however was full of stars; and in spite of everything a search for
“World Cup ad” on YouTube brings up the Nike “Winner Stays” as the first result
even though the ad does not refer to the World Cup. This growth in digital and
social media has given non-sponsors a chance to capitalize on the World Cup; as
of 6 June, only 6 of the 11 most shared football ads online were from official
sponsors.21
The ability of the FIFA to enforce laws and bylaws regarding adverts that
appear well beyond the borders of Brazil seems futile and challenges even the
most stringent policy enforcement, as evidenced by the consumer polls.

With
on-site social media policies that place strict prohibitions on competing
athletes and accredited personnel from using social media for commercial
purposes, there is an implied expectation that athletes will follow the rules
or else risk facing potentially severe sanctions that ultimately could
jeopardize their eligibility. While rival brands (to TOP sponsors) likely will
not risk their athletes’ eligibility by running afoul of clear social media
prohibitions such as through congratulatory tweets, the Olympic rules clearly
don’t apply to the casual fan who can use their social media posts to help
reinforce Olympic connections between athletes and global brands. Perhaps most
unpredictable would be the social media-savvy Olympians who may cross the
lines, through tweets, Snaps, or Instagram posts. It is the athletes, not their
sponsors, who will find any loopholes that may exist in these newfangled rules
and exploit the loopholes in the thriving social media space.22

 

India

Incidentally,
India has not enacted specific anti-ambush marketing laws. Redress may be
sought under the Trade Marks Act, 1999, the Copyright Act, 1957 and the Emblems
and Names Act, 1950 and the common law notion of passing off. However, ambush
marketing techniques have evolved to the extent that they clearly avoid intellectual
property laws and are clever enough to not make any direct mention of the
protected terms. Today with the stakes in sports being higher than ever, the
sponsors are very much concerned about their rights and interests although
protection provided under trademarks act, competition law seems to be enough to
deal with every situation of ambush marketing but in reality they are not
enough and are not sufficient for each and every situation.

The  Delhi 
High  Court  refused 
to  accept ambush  marketing 
as  a  plea 
for  infringement  of intellectual  property 
when  the  International 
Cricket Council  brought  a 
suit  against  Britannia 
during  the World  Cup.23  In ICC  Development 
International  Ltd (ICCDIL) v
Arvee, the subject of dispute was a contest was  organized 
by  Arvee  to 
win  tickets  to 
the  World Cup.  The 
catch  phrase  used 
to  publicize  the 
contest was  the  same 
as  what  the 
ICC  had  got 
registered. Arvee  was  therefore, 
sued  on  grounds 
of  passing  off and 
ambush  marketing.  Again, the claim of ambush marketing was not
recognized by the Court and acts of the defendant were not considered misuse.24  In 
the  case  of ICC  Development v EGSS,  an injunction 
was  granted  against 
the  defendant  for misuse 
of the  world  cup logo 
only  because  there 
was a copyright infringement as the logo was held to be an artistic work
under the Indian Copyright Act.25

The
case for legislation must be made on rational economic grounds in the public
interest and in the specific Indian context. The case for legislation seems a
strong one, especially from the perspective that the Indian sports ecosystem
needs a catalyst that large-format events can provide.

In
India, brands often take the route of trademark infringement because that is
the easiest and fastest way to get an injunction to stop the other brand from
ambushing. The other option is filing a case under the MRTP (Monopolies and
Restrictive Trade Practices) Act.

In
all cases, the Courts go into the intention of the party and the message that
the ad or marketing campaign conveys to the general public, and what the public
might perceive from the advertisement or activity, which is the result of
marketing. More importantly, the Court will look at whether there is
disparaging of the competitor brand and if they have used the competitor
trademark in any manner.

Conclusion

Advertising
which some official sponsors might classify as ambush marketing was not
prevented in cases such as Sydney Olympics 2000, FIFA World Cups etc, as we
have already seen. For the unofficial sponsors, this advertising was simply
smart marketing. The question to be posed is, could and should legislation
aimed at maximizing the revenue for Games organizers by seeking to protect
official sponsors limit the legitimate marketing activities of non-sponsors? Many
of the activities previously labelled ambush marketing, competitive advertising
during and around sponsored events for example, are now seen as legitimate
activities26.
The creative use of ambush marketing tactics will probably always be a source
of irritation to event owners and their official sponsors, but the event owners
have accepted that the level of brand competition that exists in other media is
also likely to occur in sponsorship and associated activities. The law as it
now stands seems unable to accommodate the concerns of official corporate
sponsors. There is no limit to human ingenuity. As such, ambush marketing at
the margins will arguably always occur27. Sports  has 
undoubtedly  become  a 
transpiring  international  culture, 
and  major events like the
Olympics and  the World  Cup 
is  where  the 
marketers can grab the opportunity to communicate with  the 
world  internationally.  This 
then  serves  as 
a  global  communication 
medium  of  commerce 
with  the competency of  supplying 
a  carrier  to 
companies and  firms  to 
acquire  viable  competitive advantage

If
one overall conclusion is to be drawn from the experience of the Sydney 2000
Act, it is that the reality of ambush marketing is such that laws alone may
well prove inadequate for responding to ingenious marketing strategies. The organizers
of events of this magnitude must develop an overall strategy which includes
both legal and practical (non-legal) initiatives for dealing with the issue of
ambush marketing. Any marketing strategy that still manages to ambush the event
must be held to be legal, no matter what the questions regarding the ethics
behind it is. The customary statutory measures must be enacted to take down
direct ambush marketing strategies that latch on to the intellectual property
of the event. Along with that, there must better decisions on the part of the
event organizers while distributing the broadcasting rights as well as to
ensure the advertisement spaces in and around the event locations. All of this
still may not be sufficient to bring down a huge corporation such as Nike down
to its knees, but it might still help prevent the small scale ambush marketing.

 

1 Sandler  D 
M  Shani 
D,  Olympic  sponsorship 
vs  ‘ambush’ marketing:  Who 
gets  the  gold? Journal  of 
Advertising Research, 29 (4) (1989) 9, 11.

2
https://www.feedough.com/ambush-marketing/

3 Cran  David 
Griffiths  Simon, 
Ambush  marketing: Unsporting  behaviour 
or  fair  play? Entertainment  Law Review, 21 (8) (2010) 293-297.

4 Schwarz E C & Hunter J D,
Advanced theory and practice in Sport 
Marketing,  (Oxford,  UK: 
Butterworth-Heinemann/ Elsevier), 2008.

5
http://www.financialexpress.com/industry/the-return-of-ambush-marketing/960724/

6 Miller  Nancy 
A,  Ambush  marketing 
and  the  2010 Vancouver-Whistler  Olympic 
Games:  A  prospective 
view, http://www.imakenews.com/iln/e_article000867643.cfm  (12 April 2010).

7 Stephen Townley, Dan Harrington
and Nicholas Couchman, “The Legal and Practical Prevention of Ambush
Marketing in Sport”, (1998) 15(4) Psychology and Marketing 333 at 335.

8
https://en.elevent.co/blogs/sponsorship/16644081-top-10-sponsorship-ambushes

9 Mcdonald  Mark 
A  Milne 
George  R, Cases  In 
Sport Marketing,  (Jones  and 
Bartlett  Publishers  Inc, 
Sudbury), 2003, p. 190.

10
http://www.bizcommunity.com/Article/196/147/49102.html

11
https://www.wsj.com/articles/SB10001424052970204731804574391102699362862

12
http://www.lewissilkin.com/Insights/The-FIFA-World-Cup-2018-Ambush-Marketing-and-the-Law

13
http://www.lewissilkin.com/Insights/The-FIFA-World-Cup-2018-Ambush-Marketing-and-the-Law

14
https://www.lawinsport.com/topics/articles/item/sport-the-digital-battle-between-sponsors-rights-holders-and-ambush-marketers#_ftn1

15
https://www.theguardian.com/sport/2016/jul/22/us-olympic-committee-bullying-unofficial-sponsors-hashtags

16
https://www.theguardian.com/football/2010/jun/15/world-cup-itv-robbie-earle

17 Rochelle Burbury, “Ansett
moves to thwart Qantas ‘ambush'”, The Australian Financial Review 5
September 2000 at 34.

18 Lisa Allen, “SOCOG win
against pirate Olympic caps”, The Australian Financial Review, 27 July,
2000 at 5.

19 Chanavat, N and Desbordes, M
(2014). Towards the Regulation and Restriction of Ambush Marketing? The First
Truly Social and Digital Mega Sport Event: Olympic Games, London 2012.
International Journal of Sports Marketing & Sponsorship 15(3): 151–160,
DOI: https://doi.org/10.1108/IJSMS-15-03-2014-B002

20 Andrew Mulholland, ‘City &
Gild: Has the World Cup Lost its Bite?’ CityAM, 27 June 2014, last viewed 13
August 2013,
https://www.cityam.com/1403851981/city-gild-has-world-cup-lost-its-bite,

21
https://www.lawinsport.com/topics/articles/intellectual-property-law/item/how-successful-were-fifa-and-its-sponsors-at-protecting-their-brands-during-the-world-cup#references

22
https://www.entsportslawjournal.com/articles/10.16997/eslj.199/

23
http://www.rediff.com/cricket/2002/dec/04/reject.htm (14 April 2010).

24 ICC  Development 
International  Ltd  (ICCDIL) v Arvee, (2003) 26 PTC 245(Del).

25 ICC Development v EGSS, (2003)
26 PTC 228 (Del).

26 Meenaghan T (1996). Ambush
marketing – A threat to corporate sponsorship. Sloan Management Review, 38,
103-113.

27 Curthoys J & Kendall C
(2001). Ambush marketing and the Sydney 2000 Games (Indicia and Images)
Protection Act: A retrospective. Murdoch University Electronic Journal Of Law,8
(2), http://www.murdoch.edu.au/elaw/issues/v8n2/kendall82.html. Accessed 06
August, 2003.