Stiff competition: how the Olympics is tackling ambush marketing

The summer of 2012 is shaping up to be an eventful one. The London Olympic and Paralympic Games, or London 2012, are being held in the UK, while Ukraine and Poland are jointly hosting the UEFA European Football Championship. At London 2012 sprinters, cyclists, swimmers and archers— and many more besides—will compete for gold.

Europe’s footballers want to be known as the continent’s finest when Euro 2012 kicks off. Those who are lucky enough to have tickets are looking forward to seeing their favourite sports played out on the international stage, while billions of people will be supporting their countries from home.

Make no mistake: the summer of sport will attract huge audiences. This makes London 2012 and Euro 2012 excellent platforms for accessing consumers. Brands of all shapes and sizes have signed up to sponsor. The list of some of the brands concerned is impressive: Coca-Cola, McDonald’s, Visa, Omega and Samsung are worldwide partners of London 2012, while Coca-Cola and McDonald’s are official sponsors of Euro 2012, along with Adidas and Carlsberg.

Sponsors have paid large sums of money for the right to be officially associated with these events (BA reportedly paid £40 million to sponsor London 2012). When Westfield became the official shopping centre developer of London 2012 late in 2011, the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG), the body responsible for organising the Games, achieved its target of raising £700 million in domestic sponsorship.

These are vast sums of money, but the level of revenue needed to organise and run events such as London 2012, means it is essential.

To justify the high costs of sponsorship, LOCOG and UEFA, the body in charge of European football, have to make it exclusive, and this is why these events are brands in their own right. LOCOG puts it best: “The London 2012 brand is fundamental to the Games. It is how we identify the Games, how we communicate our ambition, and how we drive excitement and enthusiasm for the Games.

The London 2012 brand is also vital to the funding of the Games and is the London 2012 Organising Committee’s most valuable asset. To ensure we maintain both the emotional and commercial value of the brand, we need to carefully control its use and prevent its unauthorised exploitation.”

Those who are looking to exploit these events without authorisation come in different shapes and sizes, but ambush marketers have long since been singled out as a particular threat.

Ambush marketing isn’t a concept that is set in stone, says Dan Smith, a director and the head of advertising and marketing law at Wragge & Co LLP. “There is no settled or statutory definition of what ambush marketing is in the UK,” he explains. “A working definition might be something like: ‘an ambush marketer is a company other than an official sponsor of an event competing with official sponsors to secure a marketing benefit from that event’.”

Similarly, there is no legal definition of ambush marketing in Poland, where Euro 2012 is being jointly held, says Krzysztof Czyżewski, a partner and advocate at Czyżewscy kancelaria adwokacka SC. He says: “Ambush marketing is described as being parasitic or treacherous marketing.

Distinction is made between ambush marketing by association, the aim of which is to create false associations with sports event, and intrusive marketing, when a marketer tries to gain benefit in a manner other than creating false associations with an event.”

Ambush marketing is probably best defined in practice, rather than in theory. At the 2010 FIFA World Cup in South Africa, 36 young women donned orange mini-dresses bearing an unofficial sponsor’s logo during a match between Holland and Denmark. Two of them were arrested under South Africa’s Merchandise Marks Act (which contained specific provisions for the event) for trying to derive “special promotional benefit” from the World Cup, although the charges were later dropped.

There are some who think that ambush marketing is an incorrect way of describing the majority of unofficial marketing that goes on at major sports events.

“TO ENSURE WE MAINTAIN BOTH THE EMOTIONAL AND COMMERCIAL VALUE OF THE LONDON 2012 BRAND, WE NEED TO CAREFULLY CONTROL ITS USE AND PREVENT ITS UNAUTHORISED EXPLOITATION.”

Dr Geoff Pearson, a lecturer in law at the University of Liverpool Management School and Director of Studies for the MBA (Football Industries) programme, says: “Some academics argue that what we’re now seeing in sport is parallel event marketing, rather than deliberate ambushes of rights holders. Ambush marketing can take many different forms; some of them unlawful and some of them perfectly lawful. I think it is difficult to have a single definition that would be acceptable to everybody.”

Pearson adds: “The type of language that we use is very negative. We hear about ambush marketing and parasitic marketing—it’s not labelled ‘entrepreneurial’ marketing, is it? Certainly in terms of the early writings on ambush marketing in the 1980s, it was all heavily driven by the sporting organisations, highlighting the damage that this can cause to the value of sports rights. This may well be the case, but I’ve yet to see any scientific evidence that this actually does take place.”

“It’s often used in a pejorative sense because there’s a lot of anti-ambush marketing publicity from the people who organise events,” Smith says. “But when you’ve got an event like London 2012 that so dominates the national discourse, it’s not surprising that companies and brands want to be a part of that conversation.”

Performance-enhancing laws

Without exclusivity, it is difficult to see how event organisers such as LOCOG and UEFA could attract sponsors at an appropriate level and so raise the necessary funding to run the events, in addition to the public funds they already rely on.

LOCOG and UEFA protect the London 2012 and Euro 2012 brands with IP rights that are afforded to them by different pieces of legislation. A combination of registered trademarks, copyright, registered Community designs, and common law, as well as the Olympic Symbol Protection Act and the London Olympic Games and Paralympic Games Act 2006, cover the London 2012 brand. LOCOG protects ‘London 2012’ as a trademark, as well as the London 2012 mascots.

Interestingly, the 2006 act provides LOCOG with another way of protecting the London 2012 brand. LOCOG says the act “prevents the creation of an unauthorised association between people, goods or services and London 2012”.

This was, perhaps, negotiated and passed with ambush marketing in mind, says Smith. “What is very easy for companies is to conjure up a connection to an event, without using the name of that event or the specific trademarks that have been drawn up around that event,” he explains. “You could just refer to ‘the 100m final’, for example, or ‘the summer of sport in London’. That makes it easy to get around traditional IP protection.”

Event organisers and sponsors would find it difficult to crack down on unofficial association with an event, and without IP laws shoring up the cracks in which sophisticated ambush marketers operate, something else is needed.

Smith says: “The answer, at least as far as the IOC (International Olympics Committee) is concerned, is to demand specific legislation that provides much broader protection. In the UK, that’s the London Olympic Games and Paralympic Games Act 2006. It creates the London Olympics association right, which confers on LOCOG the exclusive right to make representations in a manner likely to suggest to the public that there is an association between London 2012 and goods or services, or providers of goods or services.”

Essentially, the association right would be infringed if a commercial entity used a representation that suggests to the public that it—or its goods and services—are associated with London 2012. “This is very broad as a concept,” says Smith.

“If I advertised my healthy biscuit brand by having a picture of some people running on an athletics track and I put that out at the time of London 2012, it could be sufficient to amount to an association on the pure meaning of the words—certainly if I added a reference to ‘medal winning taste’. Whether LOCOG would then actually attempt to enforce becomes the critical question.”

Ambush marketers who are looking to associate themselves or their brands unofficially with London 2012 must be aware of an association right and tread carefully.

Chris McLeod, a partner and the director of trademarks at Squire Sanders in London, says: “The specific legislation has made it difficult to do anything on an extensive scale that cannot be shut down fairly quickly.”

Smith agrees: “I would advocate a high degree of caution. This legislation is tough to get around.”

McLeod thinks that LOCOG is hoping the legislation will have a deterrent affect so that it doesn’t have to spend its finite resources tackling ambush marketing during the games. “It will be interesting to see how far people will go and what will be permitted,” he explains. “It will also be interesting to see what will be tolerated and what won’t be, and how strictly LOCOG is going to enforce the legislation against ambush marketers.”

Another deterrent could be taking an ambusher marketer to court under the 2006 act. “LOCOG could take a case to court before the Games to act as a deterrent, although they wouldn’t want it be a borderline one,” says Smith.

McLeod adds: “They could choose to make an example, but that could attract adverse publicity, and there is a chance that it would overshadow the event. It would be possible to get an injunction and damages, so you could get an exemplary judgement from the courts, but that would also divert funds and resources.”

Running on empty

The association right provision of the London Olympic Games and Paralympic Games Act 2006 was discussed with the IOC, which oversees Olympic sports worldwide, during negotiations over London’s bid to host the 2012 games. The UK government ultimately enacted this provision in the 2006 act. Some sports organisations insist on this type of legislation when countries are bidding to host an event.

Countries have to submit draft legislation for combating ambush marketing when bidding to host UEFA’s European Football Championship.

A UEFA document outlining the requirements for bidding to host the 2016 championship says: “UEFA requires a draft of specific legislation ... that prohibits the direct or indirect use, by any means, without UEFA’s authorisation, of any name, designation, brand, insignia, logo, design and/or intellectual property, which suggests or creates the impression that it is authorised by, or that it is in any way commercially associated with, UEFA or UEFA Euro 2016.”

But a bid will not be dismissed if a country fails to legislate as UEFA would like it to. Czyżewski says that UEFA negotiated certain IP protection guarantees. “However, no such act has been enacted in Poland. What is more, even a draft of the bill which had been prepared was not publicly discussed.”

He adds: “Special legislation for a specific event would be an extraordinary regulation in Poland. Taking into account the heavy public protests in Poland against ACTA (the Anti-Counterfeiting Trade Agreement), any regulations that could be unjustifiably favourable for UEFA or the official sponsors would also be widely criticised.

Therefore, granting wide monopolies to the event for organisers and sponsors could even have adversely affected the perception of football fans, and the goodwill of the official sponsors themselves.”

Instead, UEFA is primarily using existing national laws to protect the Euro 2012 brand in Poland. It has UEFA, Euro 2012 and Poland/Ukraine 2012, including their local equivalents, as trademarks.

However, this may put UEFA and the Euro 2012 sponsors in a disadvantaged position in Poland. Czyżewski says that UEFA must rely on the Industrial Property Law and the Combating Unfair Competition Act to protect the Euro 2012 brand. Problems would arise when trying to prove that aspects of these laws have been broken in court.

“Ambush marketing usually does not result in creating a risk of confusion, as it is understood generally,” he explains. “Both trademark and combating unfair competition laws require that there be a risk of confusion before an act can be deemed to be illegal.”

On top of that, Polish procedural law is “not a good companion” in the fight against ambush marketers, says Czyżewski. “Action would need to be quick to stop the practices. Polish courts however usually act rather slowly, even in granting interim injunctions— which could take at least two or three weeks, and which could then be appealed, which would mean a further several weeks. Main proceedings are long— usually one to two years at first instance.

“Because there is no specific regulation available, the action of the police for ambush marketing will be rather limited.”

It is important that the position of official sponsors of Euro 2012 is strengthened in Poland using information and advertising campaigns, says Czyżewski. The Polish Ministry of Sport and Tourism established a company, PL.2012, to coordinate organisation of Euro 2012, and a special section of it was formed to coordinate IP enforcement.

“The section actively informs of the law on use of IP rights, and cooperates with police and customs offices which can act against counterfeit products,” he explains.

With the summer of 2012 rapidly approaching, interest in these events is definitely increasing. What is unclear is how ambush marketers will be identified and how they will be dealt with during these events. This will be a hot topic of conversation among IP professionals, brands and consumers throughout these events and for a long time afterwards.