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Policy and Advocacy
Board Resolutions
Ambush Marketing Legislation





November 10, 2010

Sponsoring Committee: Emerging Issues Committee


Resolution

WHEREAS, organizers of major sporting and other entertainment events seek to generate greater revenues by preventing non-event sponsors from engaging in unauthorized marketing and advertising activities that create associations with the event (so-called "ambush marketing" activities);

WHEREAS, ambush marketing activities in many cases may be permissible under established trademark or unfair competition laws;

WHEREAS, the intense competition to become the host country for major events increasingly has led to the enactment of special legislation to prevent ambush marketing for such events as the Olympic and Paralympic games in the United Kingdom, Canada and Brazil; the Commonwealth games in Australia; and the World Cup in South Africa; and

WHEREAS, ambush marketing legislation often extends sponsors’ and organizers’ rights well beyond the protection of traditional trademark and unfair competition laws, thus impeding existing trademark owners’ rights by failing to appropriately balance the interests of official sponsors and event organizers with free commercial speech, fair use and the legitimate commercial activities of others;

BE IT RESOLVED, that the International Trademark Association recommends that countries electing to adopt ambush marketing legislation relating to major events ensure that the legitimate rights of trademark owners and the public to use trademarks and descriptive terms fairly are balanced appropriately against the rights of event sponsors and organizers.

BE IT FURTHER RESOLVED, that the International Trademark Association recommends that ambush marketing legislation relating to major events should be based on the following principles and guidelines:

a. A reasonable balance should be struck between the interests of the organizers, sponsors, local businesses and property owners, the local community in which the event will be held, and trademark owners.

b. Prior to adopting ambush marketing legislation for the protection of a major event, event emblem or word, there should be consultation with potentially affected parties.

c. The special protections granted to organizers and sponsors of a protected event should be limited in time so that they are in effect only for a certain amount of time leading up to the event and for a reasonable amount of time following the event.

d. Restricted "ambush marketing" activities should be limited in scope and clearly defined so that only commercial activities that create or are likely to create a false implication of sponsorship or association for the non-sponsor or confusion among the public as to sponsorship are prohibited.

e. Remedies in ambush marketing legislation should minimize the risk of sponsors using overreaching rights of action to the detriment of bona fide trademark owners.

f. Special protection should not be granted to any single non-distinctive term or symbol and such terms and symbols should remain available for use by all traders, so long as use of such single term or symbol does not create a false impression of sponsorship of the event.

g. The validity of pre-existing rights, whether intellectual property rights, tangible property rights, contract rights, and others, should be recognized and reasonably accommodated, especially when establishing such restrictions as “clean zones” and “clean transport zones.”

h. The effect of ambush marketing legislation on trademark applications, particularly for symbols, should be taken into account. For example, it may be appropriate to provide that a conflicting application remains in limbo pending expiry of a special protection period.

i. Ambush marketing legislation should make it clear that the organizers and/or sponsors of the event are the only entities responsible for bringing, or entitled to bring, civil actions to enforce the legislation.

j. Express exceptions to violation of ambush marketing legislation could include ongoing activities by existing organizations, registered trademarks and trade names. The categories of exceptions should be appropriately and carefully defined - for example the manner in which a registered trademark category is defined may also need to include device marks and "brand extensions." Pre-existing unregistered trademarks and trade names should be taken into account and descriptive and other permissible fair uses should also be excepted, so long as they do not create a false impression of sponsorship.

k. In the interests of appropriately balancing the respective parties' rights it would be preferable for ambush marketing legislation to avoid presumptions of violations and rather make the inclusion of protected emblems or words a factor to be considered in assessing whether a violation has occurred.

l. Ambush marketing legislation might provide for civil remedies as are available in other types of intellectual property matters, such as injunctions, damages, seizure of counterfeit goods, and corrective advertising, but should not provide for criminal penalties, such as criminal fines and imprisonment.


Background

“Ambush marketing” is a relatively recent concept that evolved out of the fierce competition for and lucrative benefits and fees of major sporting events such as the Olympics and the World Cup. Although not necessarily a violation of traditional trademark and unfair competition laws, ambush marketing is considered to occur through the unauthorized association with the event or use of the event’s trademark indicia by non-sponsors. Examples often cited are groups of attendees wearing clothing of a color associated with a particular brand, or the painting of a design resembling a soccer ball on the nose cone of a commercial airliner.

To make their bids to host an event more attractive and in light of ever-increasing demands by potential sponsors, many countries have enacted special legislation to prevent ambush marketing, often without considered regard to legitimate rights of non-sponsoring trademark owners. In an effort to moderate the overly sponsor-biased approach to such legislation, the Emerging Issues Committee prepared submissions to the New Zealand government in relation to the Major Events Management Act of 2007 (New Zealand) and to the Canadian Government in relation to The Olympic and Paralympic Marks Act (Canada). The final legislation enacted in New Zealand featured a range of modified provisions consistent with INTA’s submissions, but the Canadian Government moved too quickly to consider INTA's or other public submissions.

In order to develop a formal position and a set of guidelines for commenting on future ambush marketing legislation, the Committee conducted a survey of a representative sample of INTA’s members, many of whom had been official event sponsors. Overall, members clearly endorsed an approach that sought to moderate an overly draconian or overly sponsor-biased approach to ambush marketing legislation at the expense of trademark owners. Based on the survey and its prior analyses and comments on prior ambush marketing legislation, the Committee believes it is appropriate for INTA to endorse a set of principles and guidelines which will assist in seeking to achieve a balance between sponsors’ rights and the rights of trademark owners and the public. The list is non-exhaustive and can be expanded as ambush marketing legislation and the activities it seeks to prevent evolve. The following is the rationale for these principles:

Balanced Approach
A balanced approach to ambush marketing legislation provides reasonable protection to all affected parties without allowing one group to hold a special status to the detriment of other groups. Trademark owners fall into all the various categories of affected groups, with some finding themselves in the sponsor category for some events and in other categories for different events. A balanced approach also helps to avoid the public perception that event sponsors are being overly aggressive in protecting their interests.

Public Consultation
Countries planning to adopt ambush marketing legislation should circulate a proposed draft of the legislation and consider comments from affected parties prior to adoption of the legislation. Countries affording a notice and comment period tend to be more amenable to adopting ambush marketing legislation that is more balanced in its approach than the initial draft. Those countries adopting ambush marketing legislation without input from affected parties tend to pass legislation that is more sponsor-biased. Allowing all affected parties to participate in the process allows the drafters to consider points of view that may not otherwise have been considered and usually results in legislation more specifically tailored to its purpose without unnecessarily impinging on pre-existing rights.

Time Limitation
Because the protections provided to organizers and sponsors in ambush marketing legislation are not available under traditional trademark and unfair competition laws, and often impinge on free speech, fair use, and prior trademark and contract rights, it is appropriate for those protections to be in place only for a reasonable time leading up to an event, during the event, and for a reasonable time after the event. Once the event has concluded and the reasons for the ambush marketing legislation no longer exist, the special protections should expire.

Limitation of Scope
The purpose of ambush marketing legislation is to protect the interests and investments of the event organizers and sponsors. Accordingly, the scope of the protections should be tailored specifically to protect those interests without prohibiting fair uses and speech that do not injure the organizers and sponsors. Those activities and other non-commercial activities that do not create a false implication of sponsorship or association do not injure the event organizers and sponsors and should not be prohibited by ambush marketing legislation.

Balanced and Limited Remedies
Any legislation that gives a small group of event organizers and sponsors broad power and authority over the marketing activities of others creates a very real risk of abuse and overreaching. The events at issue are often of short, or at least limited, duration, so that an advertiser forced to stop certain marketing activities never has an opportunity to recoup its losses, even if it is ultimately determined that the activities did not amount to ambush marketing. A balanced approach to ambush marketing legislation would require that trademark owners and others with pre-existing rights have a remedy to protect against an organizer or sponsor attempting to overreach the bounds of the legislation to prevent what would otherwise be legitimate marketing activities.

Fair Use and Non-Distinctive Terms
There have been a number of examples of ambush marketing legislation restricting the use of descriptive or generic terms associated with an event. For example, the Canadian Olympic and Paralympic Marks Act includes restrictions on the use of such terms as “games,” “2010,” “winter” and “gold.” There are many ways in which such terms, in particular when used on their own, could be used fairly without creating a likelihood of consumer confusion with the event marks or creating a false implication of endorsement or sponsorship. Thus, ambush marketing legislation often prohibits what would otherwise be allowable commercial expression, significantly interfering with the freedom of non-sponsors to communicate with their customers.

Recognition of Pre-Existing Rights
Some ambush marketing legislation limits the physical placement of advertising by non-sponsors and establishes “clean zones” and “clean transport routes.” This can interfere with existing property rights and other rights. For example, a trademark owner who has sponsored a sporting stadium could find its name obliterated and its signage at the stadium removed during a major sporting event at the stadium, significantly diminishing the value of its sponsorship of the stadium. Property owners and business owners may have to remove billboards and other signage within a certain distance of event venues without regard to the length of time an advertiser has maintained the sign or the cost incurred to remove it. These restrictions also can limit the options of those entities operating buses, trains, and other transportation in the area of the event so that they can accept only advertising from the smaller pool of official event sponsors. Thus, property owners and others are often forced to breach existing agreements and incur associated expenses for which there is no compensation. Such signs and advertisements that predate the special event are clearly not attempts by the owner or advertiser to interfere with the rights of the sponsors to a particular event and should not be considered “ambush marketing.” Ambush marketing legislation should make reasonable accommodation for these pre-existing rights.

Impact on Trademark Registration Process
Ambush marketing legislation often restricts the use of images associated with a special event that that have many other uses or connotations apart from the event. For example, legislation passed to protect the sponsors of the FIFA World Cup might prohibit the registration of an image of a soccer ball by non-sponsors of the event. However, there are many different entities not associated with FIFA that would also have legitimate reasons to use the image of a soccer ball in a trademark, such as a youth soccer league, or a sports equipment retailer. Rather than rejecting registration of such a trademark outright, suspending such an application until after the expiration of the protection period by the ambush marketing legislation would allow such applicants to maintain priority dates and applications for legitimate marks.

Enforcement Authority
Ambush marketing legislation provides special protections to the organizers and sponsors of the event. It is the organizers and sponsors of the event who are damaged by ambush marketing activities and it should be only the organizers and sponsors who bring any civil actions necessary to enforce the legislation against violators.

Express Exceptions to Violation
There are a number of ongoing activities by existing organizations that are clearly not attempts by such organizations to unfairly trade on the popularity of a particular event or inappropriately associate themselves with it. Ambush marketing legislation should exclude such prior rights and activities from the prohibitions against ambush marketing. Such exceptions should be narrowly tailored, however, to accommodate these prior rights and activities without vitiating the purpose of the ambush marketing legislation.

Presumptions of Breach
Making the use of certain emblems or words a factor in assessing whether or not an ambush marketing violation has taken place, instead of evidence of a per se violation, more closely allies this analysis to a traditional likelihood of confusion analysis, allowing a court or other appropriate fact-finder to determine if the non-sponsor’s activities create a false implication that the entity is a sponsor of the event or is otherwise associated with the event based on the totality of circumstances surrounding the marketing activities.

Civil Remedies
Ambush marketing activities are commercial activities. Such activities involve the infringement of licensed rights, unfair competition methods, unfair advertising practices and the like. The damages caused are economic and reputational. Therefore, it is appropriate to provide for the same types of civil remedies allowed in these types of causes of action, such as injunctions against continued breaches or monetary damages. Imposing criminal penalties, such as imprisonment, for ambush marketing violations gives event organizers and sponsors an inordinate amount of leverage against potential violators, by threatening their very freedom. Criminal penalties for ambush marketing activities are disproportionate and inappropriate under these circumstances.


Given the above analysis and explanations, the Emerging Issues Committee recommends that the Board adopt a resolution setting forth principles and guidelines that should be taken into consideration when countries consider adopting ambush marketing legislation in order to minimize any detrimental effects on existing trademark rights, other pre-existing rights, and fair uses.