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Marketing is
the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to
create, exchange, and satisfy individual and organizational
objectives. Simply put Marketing is figuring out what one has to
do to sell ones product or service for a profit. But recently the
multinational companies all over the word in an attempt to
maximize their profits have engaged themselves in what many
baptize as ambush marketing.
The term ambush marketing first coined by Jerry Welsh, is an
attempt by a third party to associate itself directly or
indirectly with an event(s) or the event(s) participant(s),
typically major sporting events like the Olympics or the World
Cups, without their sanction, thereby depriving the official
sponsors, suppliers and partners of much of the commercial value
deprived from the ‘official’
designation. It is for this reason that ambush marketing is
frequently referred to as parasitic marketing.
The objectives of ambush marketing are twofold:
1. Firstly to get maximum returns on the marketing buck and
2. Secondly to undermine the branding efforts of the rivals by
stealing the attention, increasing the clutter and confusing the
viewers.
Ambush marketing can take various forms. It can be either direct
or indirect.
(A) Direct Ambush Marketing
Sprints Communication Co. resorted to direct ambush marketing in
the 1994 Football World Cup by using the official logo without
permission of either FIFA (Football governing body) or Master Card
who were assigned the exclusive rights for using the world cup
logo.
(B) Indirect Ambush Marketing
Indirect ambushing can either be onsite or via the media.
(a) Onsite Ambush Marketing
Samsung, an unofficial Olympic sponsor, launched a very successful
onsite ambush effort in Atlanta City during the 1996 Olympic
Games. It was directed at Panasonic by taking squatters rights to
a parking lot on the outer limits of the Centennial Olympic Park.
Panasonic, the official Olympic sponsor, displayed its logo on the
CNN tower looming over the Olympic Park. The result, Panasonic
captured only three per cent awareness compared to the nine per
cent stolen by Samsung.
(b) Ambush Marketing via Media
This is done by sponsoring the broadcast of the event, sponsor
subcategories within the event and exploit this investment
aggressively, purchasing advertising time around relays of the
competitor’s event, engaging in major non-sponsorship promotions
to coincide with event and an assortment of other highly creative
and inventive strategies.
(i) Sponsoring the broadcast of the event:
This tactic is highly
effective in accessing more consumers as the media audience for
big events is normally much larger than the on-site audience.
McDonald’s had paid a hefty sum of money for the right to be an
official sponsor of the Games, which entitled it to use the
Olympic insignia. Meanwhile Wendy became the proud sponsor of
ABC’s broadcast of the Olympics. In addition to this they printed
Olympic stories on its tray liners and also slapped the broadcast
sponsorship logo on napkins, bags and signs in all its
restaurants. Wendy was therefore successful in undermining the
branding efforts of the rivals by stealing the attention.
(ii) Sponsor
subcategories within the event and exploit this investment
aggressively:
In essence this type of ambush marketing tries to associate itself
with the overall event by investing a much smaller sum of money in
some lesser elements. This tactic is, therefore, very
parsimonious.
#
In the 1984 Olympics, Fuji was the official programme
sponsor of the Games at considerable cost of $ 40 million. Their
competitors, Kodak, became the
‘sponsor’
of the U.S.
track team and of ABC television’s broadcast of the Games. Its
film thereby became the official film of the U.S. track team, and
it also proceeded to use the network’s own set of symbols to
advertise its merchandise.
# At the 1992
Barcelona Olympics, official sponsors including Reebok paid $700
million to be the official sponsors but when the US basketball
team won gold, Nike sponsored the press conference.
(iii) Purchasing advertising time around relays of the
competitor’s event:
Such tactics taken by ambushers are to
‘deny a
competitor the full benefits of their event or broadcast
sponsorship.’
However, ‘this practice successfully used by many ambushers in the
past is less prevalent now as broadcasters in many countries will
now either offer first option to the sponsor or refuse to allow
any competing advertising in slots around televised events.’
(iv) Engaging in major non-sponsorship promotions to coincide with
event: This is understood to be the only way for ambushers to gain
consumer consciousness when the sponsor has committed its
marketing communications budget largely toward sponsorship. Since
such tactics normally use mainstream media advertising it can be
regarded as a form of ambushing in the broadest sense.
Such form of
advertising was resorted to in the Winter Olympics held in
Lillehammer, Norway in 1994, where Visa was one of the official
sponsors for the Olympic Games. American Express (Visa’s
counterpart) launched an advertising campaign with the slogan:
If you are
traveling to Lillehammer, you will need a passport, but you don’t
need a visa.
A survey later found that 52 % of the respondents thought that
American Express was the official sponsor of the games. Although
it was lower than Visas 72%, American Express had a reason to be
pleased since it had not paid a penny for the event while Visa
paid $ 40 million to gain the official sponsor status.
(v) Other
highly creative and inventive strategies:
Here ambushers display their creativeness, ingeniousness to
conceive inventive ambush marketing practices.
One such practice is In- Film advertising which includes placing
of product bill boards behind the actors’ car, making the actors
slurp famous Cola brands etc. In Film advertising was resorted to
by Coca Cola when they ostensibly paid Sanjay Gupta, the producer
of the film Kaante, Rs. 4 Crores to feature their product Coca
Cola in some of the scenes of the movie and to air promos of the
film that incorporate the Thums Up brand. Going by the promos of
the film it appeared that Thums Up had roped in six stars to
endorse their product. Pepsi were justifiably not too pleased with
the advertising because it had the effect of hijacking their very
visible brand ambassador Amitabh Bachchan.
Another incidence of ambush marketing took place when a couple of
streakers ran onto the field of play during a match with Vodafone
logo emblazoned on their backs. The stadium was owned by Telstra,
Vodafone’s rivals. Vodafone’s officials later conceded that had
okayed the streaker’s suggestion for pulling of the prank that
would give it publicity.
The main consequences of ambush marketing are as follows:
1. It decreases the commercial value of the event
2. It creates unhealthy competitive environment.
3. It may adversely effect the funding of the event as it will be
beneficial for the company to be an ambusher instead of roping
huge amounts of sponsorship.
Ethical Aspects of Ambush Marketing
The question which therefore arises is whether ambush marketing
can be regarded as ethical and justifiable route of marketing. The
answer to the particular query depends on whether the response
comes from the ambusher or the sponsor/event organiser/marketer.
Corporate sponsors obviously regard this practice as unethical and
immoral. On the other hand the ambush marketers argue that it is
all a fair game and further claim that without ambushing, they
will be denied the right to participate in an important
promotional opportunity due to the inability to meet the cost of
official sponsorship.
Legal Aspects of Ambush Marketing
The majority of jurisdictions rely upon traditional laws such as
the Intellectual Property Rights (Trademarks, Copyrights and
Deign), Unfair Competition Laws and Passing Off laws to bestow
protection on the sponsors. At times countries also enact special
laws to stop market ambushers from appropriating some of the
exclusivity reserved for the official sponsors.
Intellectual Property Rights
A good registration of Symbols and Words of the games, Sponsors
Labels is a sine qua non for availing the entire gamut of
intellectual property rights against market ambushers.
Trademark Law
India enacted a new trademark law in 1999 to bring it in
conformity with the requirements of TRIPS. According to section 2
(zb) of the Trademarks Act, 1999 a ‘trademark’ is defined as a
mark capable of being represented graphically and which is
competent to distinguish the goods or services of one person from
those of the others and includes the shape of goods, their
packaging and the combination of colours. ‘Mark’ is defined under
section 2 (m) of the Trademarks Act, 1999 to include device,
brand, heading, label, ticket, name, combination of colours etc.
Here it is pertinent to note that the terms packaging, shape of
goods, colour combination were added under the new trademark law.
The new law therefore gives an opportunity to the companies
sponsoring the event and the ‘games committees’ to register their
labels/marks as trademarks. This enables the registered proprietor
of the trademark to have an exclusive right to use the trademark
in relation to his goods or services in respect of which the
trademark is registered. If any third person infringes the
registered trademark, then in such an event it will be open for
the proprietor of the trademark to institute passable legal
proceedings against the third party.
However trademark law alone cannot provide adequate remedy against
market ambushing for the reason that in most cases market
ambushers do not directly make use of the trademarks or designs of
the sponsors. They (market ambushers) usually refer to the
sponsors or the games in their products or services in an
ingenious and creative manner in order to circumvent the law.
Another predicament for the applicability of trademark law is that
at times the label/mark is not capable of registration as it lacks
the necessary distinctiveness.
Copyright Law
Copyright law provides a number of exclusive rights to the
copyright owners of original literary, artistic, dramatic, and
musical works as well as films, sound recordings, television and
radio broadcasts. Artistic work as defined under section 2 (c) of
the Copyright Acts means a painting, sculpture, drawing, engraving
or a photograph whether or not such artistic work possess any
artistic quality; work of architecture and any other work of
artistic craftsmanship.
For an artistic work to qualify for copyright protection it should
be original, i.e. it must originate from the author. The skill,
judgement and effort required are minimal.
Get up, arrangement, and colour scheme of labels used as
trademarks can constitute works of artistic craftsmanship and be
the subject matter of copyright protection. Such labels can also
be considered as drawings or engravings.
However it is pertinent to note that that no copyright subsists in
mechanically reproduced labels and cartons because no skill or
labour is involved in the production of such labels or cartons.
Copyright can be claimed only in original artistic work produced
by natural persons by the expenditure of his skill and labour.
Therefore in order to prove ownership of copyright in artistic
label or carton the original work from which the printed
reproductions have been made must be produced in evidence. In the
case of
Castrol Ltd. v. V.O. Muralidhar Reddy the defendant was
held liable for copying the colour scheme, get up and layout of
the plaintiffs Castrol; Noble tin of greases and oil products and
an injunction was granted under the copyright and passing off.
But the quandary which lies in the applicability of copyright law
is that the ambushers only suggest an association with the
sponsors, games whereas the law requires a substantial
reproduction of copyright works in order to constitute
infringement.
Passing of
Passing off is a form of tort. The tort of passing off has
undergone a plethora of changes in the course of the time. Passing
off is not defined in the Trademarks Act, 1999. It is referred to
in Sections 27 (2), 134 (c) and 135. Section 27 (2) states that
the rights of the action against any person for passing off goods
as the goods of another person or the remedies in respect thereof
are unaffected by the provisions of the Act. Section 134 (c)
refers to the jurisdiction of the courts to try suits of passing
off arising out of the use of any trade mark. Section 135
specifies the remedies available in respect of passing off arising
from the use of the trademark.
In order to succeed in an action for passing off, the claimant
must establish that:
# The claimant has goodwill;
# The defendant made a misrepresentation that is likely to
deceive/confuse the public and
# The misrepresentation damages the goodwill of the claimant.
These tests are often referred to as the ‘classical trinity’ of
passing off.
Passing off cases can be divided into two broad categories.
First are those where the competitors are engaged in a common
field of activity and the plaintiff complains that the defendants
have named, packaged or described his product or business in a
manner likely to lead the public to believe that the defendants'
product or business is that of the plaintiff.
Second type of passing off, is where it is alleged that defendant
has promoted his product or business in such a way as to create
the false impression/confusion that his product or business, is in
some way approved, authorised or endorsed by the plaintiff or that
there is some business connection between them. By this false
linkage or relationship, the defendant hopes to gain on the
goodwill of another. This observation also finds support in the
decision National Hockey League et al v. Pepsi Cola Ltd in the
following words:
nowadays, perhaps the more common type of passing off, is where
it is alleged that a defendant has promoted his product or
business in some way approved, authorised or endorsed by the
plaintiff or that there is some business connection between the
defendant and the plaintiff. By these means a defendant may hope
to cash in on the goodwill of the plaintiff.
It is the second type of passing off that quite often results in
market ambushing.
For advancing a successful passing off action against market
ambushers a sine qua non is to prove the existence of confusion in
the market which misleads the members of the public into believing
that the ambushers are official sponsors or somewhat associated
with the games/events and/or the sponsors. This is also emphasized
in the case of
H.P.Bulmer Ltd. v. J Bollinger in the following
words:
However, not every kind of connection claimed amounts to a
passing-off. There must be a representation that the defendant's
goods are connected with the plaintiff in such a way as would lead
people to accept them on the faith of the plaintiff's reputation.
One of the rare market ambushing cases which succeeded in proving
such confusion is the case of
Master Card International Inc. v.
Sprint Communication Co. v. ISL Football AG. Master Card
was
assigned the exclusive right before and during the World Cup 1994
to use World Cup logos on, and in association with, all card-based
payment and account access devices. Sprint Communications was also
involved as backer of World Cup as an official partner, a category
that was neither as extensive as that of a sponsor nor as costly.
Sprints 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 Master Card’s strong objection. In the litigation that
ensued in the Federal Court in New York City, Master Card
established that Sprint’s use of World Cup logos on its telephone
cards infringed on Master Card’s category of card-based payments
and account access devices, even though the telephone cards were
not functionally the same as Master Card’s cards. The court held
that consumers would, on seeing the Sprint card bearing a World
Cup logo, would mistakenly assume that Sprint had rights in a
category that, in fact, belonged exclusively to MasterCard.
However in more recent cases the event owners and sponsors found
it very difficult to prove the confusion required to constitute
unfair competition or passing off.
In the case of ICC Development (International) Ltd. v. Arvee
Enterprises and Anr. the plaintiffs had filed a suit for permanent
injunction restraining defendants from publishing any
advertisement associating themselves with the plaintiff and the
Cricket World Cup in any manner whatsoever. The challenge was to
the sale promotion campaign by the second defendant offering
Cricket World Cup tickets as prizes, using the slogans
Philips : Diwali Manao World Cup Jao
and
Buy a Philips
Audio System win a ticket to the World Cup,
inserting a pictorial representation of a ticket with an
imaginative seat and gate number saying
Cricket World
Cup 2003.
It was inter alia pleaded that:
# The ticket conditions of the event prohibit such distribution of
tickets, unless authorised by the plaintiff, the defendants have
resorted to
ambush
marketing
to take advantage of the World Cup without investing a single
rupee towards its success
#
It was also the case of the plaintiffs that they have been using
the words ‘World Cup’ since 1975 in the game of cricket and have
used the same exclusively, therefore, ‘Cricket
World Cup’
is associated with the plaintiffs and that the defendants by
making use of the impugned words are guilty of passing off
indicia, mark and identity of the plaintiff and the World Cup
thereby causing irreparable harm and injury to them.
#
It was also pleaded that defendants are also depriving the
sponsors of the Event from enjoying the exclusivity of rights
granted to them and preventing the plaintiff from performing its
contractual obligation.
Qua the first contention the court held:
So far as plea of
ambush marketing is concerned, the phrase
ambush marketing is used by marketing executives only. It is
different from passing off. In the passing off action, there is an
element of overt or covert deceit whereas the ambush marketing is
opportunistic commercial exploitation of an event. The ambush
marketer does not seek to suggest any connection with the event
but gives his own brand or other insignia, a larger exposure to
the people, attached to the event, without any authorization of
the event organizer. However, in such cases, there is no
deception, therefore, the defendants’ conduct cannot be
categorized as wrongful or against public interest. It is now well
settled that commercial advertisement is form of
commercial
speech.
It is a part of the freedom of speech and expression guaranteed
under Article 19(1)(a). The ‘World Cup’ or the Event is not
protected by any International treaty or domestic law, unlike the
word
Olympics and its logo, which is protected under the
Emblems and Names {Prevention of Improper Use} Act, 1950. It is
for Legislature to determine how far to curtail legitimate fair
competition and freedom of speech. From the material on record,
the advertising campaign offering tickets of the Event as prizes
without using the logo or the mark of the plaintiff cannot be held
to be unlawful.
Qua the second contention the court held that the word ‘World Cup’
is a generic term. The genericness of these words can be judged
from the fact that these words have been used to refer to several
other international sporting events, namely, Football-FIFA World
Cup, Hockey-FIH World Cup, Para gliding, Skiing, Horse Racing,
Skateboarding, Rugby, Boxing. The plaintiffs therefore have no
trademark in the said words. These words belong to one genus. Such
words can neither be brand names nor have any protection by the
registered trade mark. The court further held that prima facie,
defendants’ use of the disputed words, in the advertisement is
descriptive and not as a mark. It is a fair use, permissible under
the law. The court was therefore of the opinion that the
defendants are not guilty of the tort of passing off.
The court also rejected the third argument of the plaintiffs that
the right of publicity, in respect of ICC cricketing events vests
with the plaintiff, and they alone are entitled to profit from the
same.
Similarly in the case of
NHL v. Pepsi
the court was of the opinion
that although the impugned advertisements might constitute ambush
marketing but the advertisements in no way suggest that the
plaintiffs approved, authorized or endorsed the contest in any way
or that there was some business connection between the plaintiffs
and the defendants.
From the above discussion it becomes palpable that the courts are
reluctant to find a violation of existing laws unless there is a
clear trademark and trade name infringement and this infringement
is a part of the overall marketing campaign.
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Market
Ambushing
The
author can be reached at :nalinbawa@legalserviceindia.com