Ambush Marketing in Argentina

Author: Castrillo, Carlos V.
Published in: LA LEY 08/07/2014, 08/07/2014, 4 – LA LEY2014-D, 162
Online: AR/DOC/2236/2014


 

I. Introduction

Given the 2018 Youth Olympics to be organized in Buenos Aires and the petition filed by AFA (Argentina Football Association) to organize the Soccer World Clubs Championship, it will surely be necessary for our country to incorporate rules in its legislation to discourage AMBUSH MARKETING as was the case in countries such as Australia, New Zealand, Canada, China, USA, India, South Africa, Russia and recently Brazil. Therefore it is necessary to review the analysis of such phenomena, keeping in mind the purpose sought by these laws, the advertising practices related to them, and the constitutional limitations to such ruling.
Considering this scheme, we shall discuss around the concept of Ambush Marketing, describing then the different cases of advertising considered to be so.

This description shall allow us to understand the legal rights protected and the constitutional limitations to such protection against this practice.

Finally, we shall enumerate the conclusions to which we have arrived.


II. Ambush Marketing

 

a. Concept

 

The term was coined by Jerry Welsh, the publicist who was hired by American Express to design campaigns for this company and take advantage of the existing gaps regarding the legal framework of the sponsorship of events. He explains the need of such practice as follows:

 

The roots of Ambush Marketing can be found in several phenomena typical of modern sponsorships: the escalating prices, the distressed imagery, the exclusive category of sponsorships; their routinely poor packaging, their flawed presentation to potential sponsors; and the increasing level of marketing competition in major categories of consumer products and services [1].

 

Advertising through the sponsorship of events became increasingly important [2] when advertisers discovered that it was a friendly way to reach a large audience contrary to the barriers they had to overcome with traditional advertising [3].

 

Ambush marketing gets the same benefit of penetration that advertising associated with an event has, without the costs that have to be paid to the organizer of an event, being also a tool to elude monopoly that any official sponsor has in his particular category in an event.

 

Pineiro Puig thinks that “A general definition of ambush marketing is difficult, for this name can fit in the concept of very heterogeneous practices” [4]. Notwithstanding this, we could synthesize the several existing definitions as: any advertising that without paying royalties to the organizer of an event can achieve, lawfully or unlawfully an association with it, whether directly or by reference to the deployed activities, their geographical location, participating athletes, sponsoring companies and/or the symbolism that represent them.

 

The grounds for this practice can be found in the fact that sponsorship, and since 1984, has been reduced to a single sponsor per category, being him the one who receives all the exclusivity of the event. Apart from that, the costs to be sponsor are becoming higher and higher. Another reason is the poor and imperfect presentation of the sponsorship packages. [5]

 

Therefore, those who are not included in between the elite group of lucky official sponsors, or those who do not have resources to meet such costs, would have no choice but to watch how their lucky competition devour the different market quotas that belong to them, unless such observers try other alternatives to compete for their opportunity to defend it or increase their share.

 

Therefore, Ambush Marketing would be an alternative to circumvent the strict selection made by the organizer of an event and the excessive cost required to participate as sponsor, having the virtue of serving as a mechanism to valuate in more or less the price of sponsorship.

 

If a package offered by an Event organizer would be scarce and the economic pretension too high, ambush marketing would be an alternative against this offer . However, if the package offered has a fair price, those who cannot achieve to be official sponsors will need to invest their money in creative advertising in order to be visible and defend their market share against the competition.

 

b. Some International Cases.

 

It is said that the first Ambush Marketing practices emerged in the Olympics Games in 1984 held in Los Angeles [6], which were the first games that did not require a state subsidy for their economic support.

 

Kodak, failing to achieve to be the official sponsor against its rival Fuji, got more visibility by acquiring the rights to publicize the event from ABC [7] chain and, as a consequence, achieved a greater media exposure than the official sponsor.

 

Nike, who has always been known for not being an official sponsor of these events, made several advertising spots with athletes and the use of the Randy Newman song, I love LA, gaining more recognition than their competition, Converse , the official sponsor [8].

 

c. Classification. Legal and Illegal ways.

 

We follow the classification posed by Jorge Otamendi and his opinion regarding the legality or not of the following activities [9].

 

i. Ambush Marketing infringing the intellectual property rights of the Organizer.

 

It is not usual for someone doing Ambush Marketing to be so innocent as to infringe intellectual property rights of third parties. However, this happened in the World Cup in 1994.

 

American Express was sponsor of the event, and it had the exclusive right to use the trademarks of the organizer (FIFA) on all card payments and access to accounts. Sprint, the sponsor of long distance communications began to use such trademarks on prepaid phone cards, without authorization. The case, aside from being a trademark infringement legal issue, implied the breach of a contract. Both parties were official sponsors and the discussion was centered on whom overran the right of the other [10].

 

As we mentioned before, it is not reasonable for someone doing Ambush Marketing, who needs to hire a highly creative and costly advertising agency, not consulting previously lawyers to avoid infringing intellectual property third party rights.

 

However, those who want to associate their brand to the event, may use the designation of generic names such as the name of the sport, expressions of encouragement, such as,  – Come on Argentina-, team colors, or symbols associated with the tournament, or even the name of other sponsors or even refer to intellectual property rights, ingeniously, without mentioning them.

 

In these cases, the judges will probably have to analyze the registrability as trademarks of those signs registered and denounced to be used and, to check for confusing similarity or trademark infringement, which normally does not exist when an association with the event is achieved without infringement of intellectual property rights.

 

In 1984, American Express, having been excluded against Visa as an official sponsor had to tolerate an advertising that said “bring your Visa because the Olympics do not accept American Express” but this gave start to a war against his rival in Barcelona 1992 and in Norway in 1994 with an Ambush Marketing slogan that could be summarized as “You do not need a visa to attend the games,” referring to the permit to go to the country that was not required in any of these countries, but obviously by playing with the name of his opponent and associating therefore the main sponsor of the event to their brand [11].

 

ii. Ambush Marketing deceiving the public regarding the relationship in between the Organizer of the event and the brand owner.

 

This kind of advertising is misleading and violates basic standards of fair trading. It is true that every advertising that seeks to join the event in some way creates in the consumer’s mind, like cheating, a nonexistent relationship. However, one thing is that the consumer can believe in something, induced by advertising and another thing is that the advertising directly suggests it.

 

iii. Ambush Marketing managing to associate to the event without deception or infringement of intellectual property rights.

 

It may be supported in the constitutional right of freedom of speech [12].

Also, if there are no third party property rights infringed and finally when the organizers of events must honor agreements with athletes, teams, stadiums, cities, existing advertising guidelines, etc.

 

There are a wide variety of examples that could be classified in this category as follows:

 

1. Purchase of advertising space before, during or after the event.

 

When Kodak lost the possibility of sponsoring the Olympic Games of Los Angeles in 1984 it acquired rights of advertising from ABC and consequently achieved greater exposure than the official sponsor.

 

2. Static advertising in the area of influence of the event.

 

If the organizers of an event do not take the precaution of hiring all advertising space in the area of influence of an event, a company could associate to it by hiring many posters and achieving a visibility that could associate it to the event.

 

3. Delivery of goods free of charge to those attending the stadiums.

 

P&G, in July 2009, distributed 24.000 tubes of its famous fries outside the stadium. The public received them gladly and entered the stadium with them. The tubes were green and read “These are not tennis balls tubes”, which was quickly the subject of comment in various media programs and it was considered a great strategy of P&G who was not an official sponsor of the event [13].

4. Advertising with images or words that create an association with the event or a sportsman.

 

The name of the sport of any event (football, rugby, golf, tennis or Olympic sports) is a common word that should not be monopolized by anyone. Something similar happens with copyright: the expression of an idea is what is protected, but never the underlying idea, which remains in the public domain.

 

Pretending to monopolize a common word or an underlying idea related to an event by the event organizer would violate article 16 of the national Constitution (equal rights) and, in many cases, would violate property rights already acquired.

 

By the time the French Marie Jose Perec won 400m on July 31st in 1996, L’Equipe, sports newspaper, published a full page advertisement with the results of Atlanta. This athlete could be seen in hard effort with the slogan Veni, Vidi, Pepsi, phrase on which the descendants of Julio Cesar, if they could be found, could not claim any rights. After that, another phrase read….Marie Jose Perec, official representative of an unofficial drink in Atlanta. [14]

 

5.Prizes related to the event (tickets, t-shirts).

 

This kind of advertising, unless there is legislation expressly prohibiting it, or in case of piracy or infringing  goods, should be considered a legal practice.

 

Nevertheless, the raffle of tickets could be considered illegal when they are marketed despite the written advice expressing that their use as a promotional mean in commerce must be expressly authorized by the organizers of the event.

 

6. Sponsorship of teams, athletes, stadiums, cities.

 

Just as the organizer can be regarded as owner of the event, the teams, athletes, stadiums and cities that celebrate the event have property rights over them and in the absence of contractual provision or legal rules as the new art. 40.3 of the Olympic Charter [15], the tournament organizer should not be given any privilege over the rest without offending the right to equality and property established by Article 16 and 17 of our national Constitution.

 

In the Olympics in Barcelona, 1992, Michael Jordan managed to cover the Reebok logo (official sponsor) of his team shirt, which he had to use when ascending to the podium, with the American flag, hiding it in a patriotic attitude and therefore managing to be loyal to his personal sponsor, Nike. [16]

 

d. Strategies to avoid or reduce the risk of Ambush Marketing.

 

Therefore, the Ambush Marketing is an advertising strategy aiming to achieve an association to an event getting the advantages of this type of advertising without having to pay the costs of interacting with the sponsor. It should not necessarily mean less investment but the lack of contribution to the event organizer.

 

Considering all the different alternatives of associations with events that different companies hold, event organizers should plan strategies to prevent this practice to occur, by: buying advertising space in various media in advance or reaching agreements with their holders; agreeing with all participating athletes about their rights and obligations, under penalty of not being accepted as participants; setting conditions and limitations on the free sale of tickets; preventing access to persons wearing unauthorized trademarks, and finally, making a strategic approach to be able to guarantee the product characteristics that, ultimately, are aimed to offer for sale. In other words, the exclusive advertising right for the sponsors of the event.

 

All those aspects that would not be stipulated in agreements with third parties, could not then be required to be honored by such third parties and companies who are not sponsors, since they would have the right to make use of such opportunities that are in the public domain [17]


e. Special laws.

 

A modern tool to fight against Ambush Marketing has been the enactment of special laws prohibiting many of these actions in a previous, concomitant and post-event period, creating a “real” administrative right similar to intellectual property rights [18], which, as such, is enforceable against third parties even if there is no contractual relationship with them.

 

For this reason, by creating “in rem” rights artificially (that means opposable to third parties), which would not exist until the enactment of such laws, the valuation of official sponsorship will raise, while monopoly would be more strict and closed. This will not necessarily mean the disappearance of Ambush marketing, since there will always be “safe harbors” where companies can seek refuge to associate to the event away from condemnation.

 

It is important to mention that during the London Olympics and despite the laws prohibiting actions to achieve the association with the games to those who were not sponsors, Nike, masterfully was able to prove that the association can be achieved without breaking the law, as it is evidenced by the add “Find your Greatness “[19].

 

With the purpose of achieving this result, Nike launched its add the same day as the opening of the games, in 25 countries, while being performed by different people playing different sports, in no English cities but whose names were London, with an off voice in perfect English, therefore inducing and not suggesting an association of the trademark with the event.

 

Going back to special laws, they should of course have constitutional support to create these artificial exclusivity rights same as it happens with the laws of trademark, patents, copyrights, among others..


f. Constitutionality of such a closed protection.

 

If laws could consider illegal any kind of relation or association in between a brand and any given event, we will fall inevitably on the violation of the right of free speech.

 

Just think on the fact that no news agency dealing with the event could do advertising related to it since the announcer would be immediately associated with the event because of the news.

 

An authorization requirement of the event organizer to the agency would clearly violate free speech.

 

In other words, considering ambush marketing as illegal in a broad sense has to deal with the affection of free speech.

 

But this limitation or safe harbor regarding Ambush marketing is also seen in different IP rights… Criticism or news regarding trademarks, inventions, movie premiers or books have to be tolerated by their IP right owners. Someone may argue that in these cases the trademarks are not associated with advertising. It is true, but what are the limits between association during advertising and the infringement of the right of free expression?

 

Unfortunately, for those organizing events there are not too many solutions except for the ones that have been put on practice and have been mentioned above. It is true that events could be much more profitable if ambush marketing ceased as a practice, but freedom of speech would be threatened and the social cost of it would be much higher.


g. Analogy with other legal fields.

 

The economical consequences that have been shown through the practice of ambush marketing exist in other legal fields and what we can learn from them is not different from what jurisprudence and doctrine have been asserting regarding ambush marketing.

 

For example, see what happens in mining. The discoverer of a mineral or oil deposit will have to tolerate that after making public his discovery all adjacent properties next to such discovery could be taken by third parties who had never contributed to it.

 

The remedy for the discoverer is to invest in the acquisition of all the possible adjacent areas and to invest in the them to prevent cancellation frame the State. Due to the large investment, it is rarely possible to achieve this end, and third parties, taking such a free ride have to be tolerated.

 

Nobody has ever declared the conduct of an explorer who knowingly claims for adjacent areas to a discovery as illegal or dishonest.

 

Notwithstanding this, the Mining Code, and on a clear recognition of the existence of an “in rem” administrative right allows the discoverer to claim for some adjacent areas with priority[20]

 

Another issue would be that such third party suggests to potential investors that he is the same person to the discoverer and that any investments in his property, and because of being contiguous to the discovery initially made would be associated to the latter.

 

However, it would not be unlawful for a third party, to induce investors to think about the high possibility that the discovery could be replicated in his property, meaning that there is an association between his potential mine and the one that was discovered by his neighbor.

 

In Real Estate we can find something similar. Many projects increase the value of adjacent properties. It is not illegal or dishonest to decide not to invest in such ventures and instead invest in adjacent properties whose value, because of this existing projects, will surely rise. If any entrepreneur would want to prevent third parties from such “free riding” he has no other alternative than to acquire a more extensive area so that the added value by the given project remains in his property and does not go to third parties.

 

Once again, the third party shall not mistake others pretending to identify himself with the owner of the project. He surely can try to share some sort of associative idea if the project is promising, by inducing the third party that if would be the same to invest in the initial project than in his, which would be legal.

 

Finally, we can find several examples of AMBUSH REGISTRANTS or AMBUSH USERS in Copyright or Patent laws.

 

If a patent applicant does not claim correctly the object of his invention, or if it does not achieve to fully protect the invention, any third party going beyond what is strictly claimed will not act illegally.

 

In Copyright what is protected is the expression, not the underlying idea. If the author mistakes the commercial strategy connected to his right, he cannot blame a third party, that although based on his idea, committing no plagiarism, achieves much greater revenues.

 

III. Conclusions

 

  1. Ambush Marketing has clearly defenders and detractors.
  2. It is an international phenomenon primarily associated with sport
  3. Nobody doubts about its illegality when it violates intellectual property rights or deceives the public.
  4. Suggestion not claiming an association with an event is something different, and here opinions are divided.
  5. There are no good guys nor bad guys. Ones who are official sponsors today may be ambushers tomorrow.
  6. The difference, in our opinion, should be sought between the concept of suggesting and inducing, being suggestion the mother of deceit.
  7. Close protection against Ambush Marketing surely violates free speech.
  8. Consequences of ambush marketing are by no means different of consequences seen on other legal fields.

 

2018-02-16T18:23:07+00:00