By Dr Tay Pek San
The 2014 FIFA World Cup in Brazil ended recently. As is the case with previous mega-sporting events such as the Olympic Games, the Asian Games and the Commonwealth Games, the age-old advertising trick of ambush marketing struck again during the days leading up to as well as during the month long event. ‘Ambush marketing’ refers to the unauthorised association by corporations with major events through the use of creative marketing strategies without paying sponsorship fees. The effect is to draw the attention of the public or consumers away from the products of the official sponsor to that of the ambush marketer, who is almost always the sponsor’s rival. As a result, the official sponsor is denied the full commercial value attached to its sponsorship.
Organisers of major events usually enter into commercial arrangements with corporate sponsors to allow the sponsors the exclusive right to commercially exploit an association with such events. The association is often achieved through the use by the sponsors of the organisers’ intellectual property assets such as the official logos, emblems, mascots and slogans. Sponsors invest millions of dollars to obtain the exclusive rights to the use of these assets and to leverage such rights so as to pursue profit maximization. In addition, the sponsors also enjoy the exclusive right to exclude non-sponsors from associating with the event so that they do not free ride on an event in which they do not pay any sponsorship fee.
Mega-sporting events are powerful promotional and marketing opportunities for corporations to advertise their brands because of the global attention and interest that such events garner. Advertisements that are associated with sporting events reach out to a well-established global audience who very often can emotionally connect with the events. During the recent 2014 FIFA World Cup, a number of high profile ambush marketing campaigns went viral on the Internet and social media platforms such as YouTube and Twitter. These new technologies served as powerful advertising tools to sponsors and non-sponsors alike to create brand campaigns. A week before the World Cup began, the electronics and headphones company, Beats by Dre, released a five-minute clip on YouTube entitled ‘The Game Before the Game’ that showed how some of the World Cup football stars prepared for the sporting competition while listening to music on Beats headphones. Although Beats is not an official World Cup sponsor, it has through this commercial managed to steal the spotlight from Sony, another well-known electronics and headphones manufacturer, which is the tournament’s official sponsor.
During the tournament itself, a crafty yet creative ambush marketing took place when the Brazilian striker, Neymar, was spotted with his shirt off and, at the same time, revealing a pair of Blue Man boxers. This took place after the end of Brazil’s game with Cameroon and one might brush off the incident as Neymar’s response to the heat in Brazil. Blue Man is the trade mark for a Brazilian beach clothing and is fairly well-known in Brazil. However, Blue Man is not a FIFA World Cup sponsor but, through this incident, managed to attract the attention of the audience in huge numbers without paying any sponsorship fee to FIFA.
In light of the enormous financial investments that are involved in sports sponsorship, it has become the norm for organisers of mega-sporting events to demand that the host nation enact laws which, inter alia, protect the intellectual property assets of the organisers. In the case of the Brazilian government, after being awarded the right to host the 2014 FIFA World Cup, the legislature passed a law known as the General World Cup Law, no. 12.663/212. It provided a mechanism for the protection of the brand and symbols of the FIFA World Cup. The legislation prohibited ambush marketing activities and granted FIFA the right to seek an injunction together with legal costs, account of profits and/or damages against enterprises that indulge in such marketing strategies. Notably, the statute made ambush marketing a criminal offence.
On a number of occasions in the past, protection against ambush marketing has been based on common law causes of action and, where available, applicable legislation. Traditional areas of intellectual property law such as copyright, trade mark, passing off and design right play an important role in combating ambush marketing. Nevertheless, legal actions taken based on these areas of law have varying degrees of success for different reasons. For instance, in Federation Internationale de Football Association (FIFA) v Metcash Trading Africa (Pty) Ltd  ZAGPPHC 123 (Gauteng North High Court), Metcash was selling lollipops in a wrapper that depicted its trade mark with the picture of a football, the South African flag and the date 2010 with the zeros of the date made to take the form of footballs, which were trade marks registered by FIFA. Metcash was not an official sponsor of the 2010 FIFA World Cup. FIFA claimed that the numeral ‘2010’ was used to associate with the 2010 World Cup and brought an action in South Africa for trade mark infringement, passing off and unlawful competition. The court upheld FIFA’s claims and found that Metcash had derived special promotional benefits from its marketing activities. In contrast, in the Canadian case of National Hockey League (NHL) v Pepsi-Cola Canada Ltd 70 BCL (2d) 27 (1992), affirmed 59 CPR (3d) 216 (1995), NHL, which was an affiliated service company with 21 ice-hockey teams, had entered into an agreement with Coca-Cola as an official sponsor of the sporting event. As a result, Coca-Cola obtained the rights to use NHL symbols for its promotional programmes in Canada and the United States. However, Coca-Cola did not obtain any right to advertise during the broadcast in Canada of any televised NHL games. NHL sold this right to another company which was linked to Pepsi-Cola. Pepsi-Cola was Coca-Cola’s main business rival. In between the broadcasts, Pepsi-Cola broadcasted a show with a well-known celebrity which conveyed the message that Pepsi was the official drink of the tournament. Coca-Cola failed in its claim for passing off against Pepsi.
Lest we conclude that ambush marketing is unethical, objectionable and should be quickly outlawed by anti ambush-marketing legislation, it is worth remembering that in recent years, the boundaries of intellectual property rights are increasingly expanding. This trend may not always favour the interested parties, especially the public. Intellectual property law has developed over a long period of time to carefully balance the competing interests of the stakeholders. The balance is achieved through the provision of sufficient legal protection to encourage creative and innovative activities while, at the same time, providing principles that minimize interference with the free flow of ideas in the marketplace. The creativity of modern marketing strategies and techniques has at times blurred the distinction between what is perfectly legal conduct in advertising and what is not. Hence, any extension in protection conferred by the law must not endanger the balance in intellectual property law which has been carefully crafted over the centuries. As was highlighted in the International Trademark Association’s Board Resolutions on Ambush Marketing Legislation in 2010, ambush marketing legislation should strike a reasonable balance between the interests of the event organizers, sponsors, local businesses and property owners, the local community in which the event will be held, and trade mark owners. The legislation should not impede on free commercial speech, fair use and the legitimate commercial activities of others.[divider]
Dr Tay Pek San is an Associate Professor at the Faculty of Law, University of Malaya, Kuala Lumpur. She is the author of the books Introduction to Cyberlaw of Malaysia (2004), Protection of Well-Known Trade Marks in Malaysia (2007) and Intellectual Property Law in Malaysia (2013). Apart from teaching and researching on intellectual property law and contract law, she also provides consultancy services. She can be reached at firstname.lastname@example.org