Stealing the Show

Eow Khean Fatt briefly discusses how ambush marketing is stealing the show from official sponsors.

 

INTRODUCTION

Ambush marketing, is a term that broadly defines the unauthorised association of a party with the marketing of a particular event, whereby the party gains the benefits associated with the marketing rights of the event without having to pay any licence or sponsorship fees. In short, ambush marketing generally occurs when a non-sponsor of an event uses creative ruse to gain publicity for itself by jumping on the bandwagon of a sponsored event.

 

As a hypothetical example, in the recent World Cup, if mid-way through the finals, a young lady were to run naked through the field with a certain famous logo painted on her body, what kind of impact would that create in the minds of viewers around the world? What would be the reaction of the World Cup sponsors especially if the logo does not belong to them?

 

 

CASE EXAMPLES

During one of the previous Olympic Games, a well known digital imaging company sponsored the TV broadcasts of the Games as well as the US track team despite its competitor being the Official Sponsor. However, four years later, in the subsequent Olympic Games, the competitor retaliated when it sponsored the TV broadcasts of the Games when the digital imaging company was the Official Sponsor of the Games.

 

 

LEGAL I MPLICATIONS OF AMBUSH MARKETING

Ambush marketing whilst may be injurious to the official sponsor, is admittedly a clever way to promote competing brands. Given that one of the main principles underlying the general consumer market is fair competition, it may seem unfair to restrict or prevent the tactics associated with ambush marketing in favour of one or several brands sponsoring the events.

 

At common law, the general approach has been for the aggrieved party to sue the company ambushing the event for the tort of passing-off. The positions at common law, as reflected in the following cases, outline the difficulty faced by the courts in deciding for the plaintiffs.

 

In the Canadian case of National Hockey League (“NHL”) v. Pepsi-Cola Canada Ltd (“Pepsi”) 42 C.P.R. (3d) 390, 1992 C.P.R. Lexis 1773, NHL granted Coca-Cola the right to be its official soft drink. The arrangement, however, did not give Coca-Cola the rights to advertise during television broadcasts of NHL games. These rights were purchased by Molson Breweries, who in turn granted the rights to Pepsi, to advertise its soft drinks during broadcasts. Pepsi advertised its products through a contest called ‘Diet Pepsi’s $4,000,000 Pro Hockey Playoff Pool’ which featured Don Cherry, a well-known figure throughout Canada. A disclaimer denying any connection to the NHL appeared in advertisements against a dark background. NHL sued Pepsi contending that Pepsi was guilty of the tort of passing off because the television commercials in particular “conveyed a false impression to the public that the NHL, in some form, approved or was associated with the contest.”

 

The British Columbia Supreme Court decided that there was neither evidence nor the appearance of passing-off and ruled that although Pepsi’s actions clearly constituted ambush marketing, there was nothing that could legally sanction either Coca-Cola or the NHL from protecting Coca-Cola from its main competitor.

 

In the Indian case of ICC (Development) International Ltd (“ICCD”) v. Arvee Enterprises & Anor [2003 (26) PTC 245 (Del)], the High Court (“HC”) in Delhi refused to grant an injunction to ICCD, a company owned by the International Cricket Council in respect of a sales promotion by electronics giant Philips. Philips had promised free travel to South Africa and tickets to the World Cup cricket matches as prizes in a contest thereby creating an association with the cricket games.

 

The HC in that instance held that the marketing promotion by Philips neither amounted to passing off nor was an unfair trade practice. The Court further observed that the concept of ambush marketing was used by companies to promote their brands and the conduct in such cases could not be categorised as wrongful or against public interest and thus not unlawful in India.

 

Some of the other jurisdictions have dealt with the issue of ambush marketing in the following manner:-

 

 

SOUTH AFRICA

In South Africa, the Merchandise Marks Act No. 17 of 1941, (“MMA”) operates to protect trade mark owners from the makers of counterfeit goods, and to maintain quality, by making it a criminal offence to apply a false trade mark or trade description to goods. The MMA was amended in 2002 to extend protection to major events designated by the relevant Minister as “protected events.”

 

In order to qualify for protection, an event must be held in public and must be subject to corporate sponsorships. The MMA has built-in safeguards which provide that the Minister may only declare an event to be a “protected event” after consultation, and may not declare an event to be a protected event “unless the Minister is satisfied that the event organisers have created sufficient opportunities for small businesses, and particularly those of the previously disadvantaged communities.

 

Further, South Africa brought ambush marketing within its Trade Practice Act, for the Cricket World Cup 2003. The Trade Practice Act provides that companies are guilty if, in connection with any sponsored event, they “make publish or display any false or misleading statement, communication or advertisement which represents, implies or suggests a contractual or other connection or association between that person and the event, or the person sponsoring the event, or cause such statement, communication or advertisement to be made, published or displayed.”

 

 

SYDNEY ACT 2000

For the 2000 Olympics in Sydney, Australia introduced and implemented Olympic insignia protection legislation, which imposed strict controls on the use of words and symbols associated with the Olympics, to protect the International Olympic Committee and sponsors from ambush marketing.

 

 

LONDON OLYMPIC GAMES AND PARALYMPIC GAMES ACT 2006

The London Olympic Games and Paralympics Games Act 2006 (“LOGPA”) passed in the UK in March 2006, created the “London Olympic Association Right” that gives the London Organising Committee of the Olympic Games (“LOCOG”) the exclusive right to grant its sponsors and licensees authorisation to create an association between their businesses, goods or services and the London 2012 games (sec. 33 and schedule 4 of LOGPA). Any unauthorised association is viewed as an infringement of the “London Olympic Association Right” and would allow LOCOG to seek an injunction to stop the infringer’s activities, sue for damages and/or require an account of the infringer’s profits.

 

 

CONCLUSION

In summary, the law needs to strike a balance between protecting the rights of official sponsors and allowing genuine freedom of commercial expression, as well as the right of local businesses to benefit from the event. Therefore, the answer to the question whether ambush marketing is legal, is subject to interpretation and depends on the existing legislation governing the issue amongst various other concerns. It remains to be seen what approach the Malaysian courts will take in cases involving ambush marketing.

 

 

EOW KHEAN FATT (e This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

This article was co-written with Lock Hui Lian, a pupil in chambers at Skrine

 

 
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