Riding on the crest of sponsors’ Waves – Part 1

Instalment of ‘Ambush Marketing’

If your company is sponsoring a sporting, musical, cultural or other type of event, then you must ensure that the Sponsorship Agreement in place makes adequate provision for the possibility of Ambush Marketing…
If you are the organiser of the event then you must ensure that everything possible is done to prevent Ambush Marketing to ensure future sponsorship of the event is not put in jeopardy…

What is Ambush Marketing

Ambush Marketing essentially takes two forms;

Marketing by Association

The broad form of ambush marketing is where marketing activities are implemented by companies seeking to leverage off the official sponsor by associating their name, products, logos and services with an event for which it is not an official sponsor. This form of marketing can considerably diminish the value of the fee paid by official sponsors of events. For instance, consumers become confused as to who is the official sponsor and the alleged ‘ambushers’ gain unfair exposure and potential revenue.

This type of marketing may not infringe the intellectual property rights of the official sponsor and may involve the use of rights that have been paid for legitimately. Examples of this type of marketing include, advertising during or around the event, sponsoring players, performers and teams and engaging in promotions and competitions that coincide with the event.

Real life examples of this include, where two Cork hurlers took to the field with the logo Corona beer stitched onto their boots in an All Ireland Championship game sponsored by Guinness. In the last Rugby World Cup a Tongan player sponsored by Paddy Power agreed to change his name to Paddy Power, however the International Rugby Board ensured the tournament guides referred to his real name and threatened to impose fines against the Tongan players if they went ahead with the idea of dying their hair green. However the publicity gained by Paddy Power was surely enough to be advantageous.

Marketing by Infringing Intellectual Property Rights

The narrow and more definite form of ambush marketing is where companies infringe the intellectual property rights of the official sponsors or participants. Examples of this include the sale of unauthorised merchandise which incorporates registered trade marks or designs of the official sponsors, the use of registered logos and signs belonging to another company, committing the tort of passing off by confusing the consumer as to the origin of the brand, and advertising that misrepresents that an athlete or performer endorses a company’s products or services.

What can be done legally to prevent Ambush Marketing

Problems such as the ambiguity in the interpretation of the law, inadequate sponsorship and exclusivity agreements and the perceived low chance of successful legal action against ambushers can make companies reluctant to pursue legal action. However if properly put in place, there are provisions for protecting your brand or event.

Intellectual Property Rights (IPR) Protection

Under Irish law there is no legally recognized right in a sporting event per se. Therefore organisers and sponsors of events must rely upon IPR to protect them. Similarly there is no legally recognized right in a personality per se. Therefore celebrities need to rely on trademarks, copyright and the tort of passing off to protect their images and revenue arising from thereof.

The 1996 Trade Marks Act and the Copyright and Related Rights Act 2000 legislate for the infringement of intellectual property rights in Ireland.

Making the best use of Intellectual Property Registration is essential. Event names and designs should be registered as trade marks. Copyright should be claimed in relation to event logos and companies should ensure that any brand signs, logos and designs are adequately registered.

The crucial test for the registration of a trademark is ‘distinctiveness’ and words such as ‘Euro 2000’ and ‘World Cup’ have failed in the past. However these words combined with a distinctive logo would satisfy the test. Companies should also try to be innovative when it comes to registering trademarks and copyright. Take for example the Australian Football League which has registered the sound of a football siren for football and associated services.

Internet Domain names should also be registered with a Domain Name Registrar which is accredited by the Internet Corporation for Assigned Names and Numbers.

Both Acts mentioned above allow for An Garda Siochana to seize counterfeit goods and the legislation provides for the payment of compensation. Should this not be an adequate remedy an injunction can be taken out to prevent the offending party from selling or displaying goods and services which infringe Intellectual Property Rights.

Sponsorship Agreements

From the view point of both the sponsor and the event organiser, contractual provisions must be carefully considered.

Sponsors should seek as much protection as possible from the event organisers in terms of how offenders will be tackled. They need commitments from the event organisers that adequate provisions have been put in place to combat ambush marketing and that they have sufficient resources and capability to enforce any legal rights infringed.

Sponsors should also seek exclusivity rights to use the protected IPR of the event organisers. These clauses can be incorporated into the Sponsorship Agreement or dealt with in a separate Exclusivity Agreement. It is after all vital to the funding of an event that the event organiser has the ability to give its sponsors an exclusive association by giving them the ‘event rights’.

Event Organisers need to be careful as to who they sell advertising and broadcasting rights to, as these ‘unofficial sponsors’ may be harmful to the official sponsors of the event should there be a possibility of association between both company’s products in the eyes of the public. In this respect, agreeing rights of first refusal with the official sponsors should be considered. Again, this can be dealt with in the sponsorship agreement.

Take for example the 2008 Beijing Olympics where it is estimated that a total of 12 sponsors paid a grand sum of $866 million for the privilege of exclusivity. However in a post event survey, recognition of these brands as the official sponsor was rated below 40% amongst customers, largely due to the marketing by association implemented by rival brands.

Next week’s article will look at how the Fédération Internationale de Football Association (FIFA) have tackled the problem of ambush marketing ahead of the 2010 South Africa Football World Cup.

This article was written by Patrick Conliffe, solicitor, and edited by Paul Keane
If you have any queries in relation to the topic of this article please contact Paul Keane at pkeane@reddycharlton.ie or Elaine Mc Grath at emcgrath@reddycharlton.ie or at (353) 01 6619500

Disclaimer

This information is for guidance purposes only. It does not constitute legal or professional advice. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. No liability is accepted by Reddy Charlton for any action taken in reliance on the information contained herein. Any and all information is subject to change.