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AMBUSH MARKETING The year 2006 has been a year full of major international sporting events where the complex issue under analysis has risen, to local concern, mainly before, during and after the FIFA World Cup which took place in Germany. Ambush marketing, also called parasite marketing, is a practice common to major cultural or sporting events where an advertiser which is not an official sponsor of the event intends to associate itself to the event without paying the organizer for the right to do so. However, sports particularly provide companies with a greater opportunity to advertise their marks, goods and services to a wide and sometimes worldwide audience and, at the same time allows interested parties to be associated with a major event. We shall only refer to sporting events for our purpose. There are two types of ambush. The first is the so called ambush marketing by association, and happens when a non-sponsor gives out the impression of being an official one, whereas the second form, ambush marketing by intrusion is when the non sponsor intends to be associated with the event by means of its media and/or spectator exposure. An example of the first type of ambush marketing is when the non sponsor uses the official event’s logos, symbols or mascots. An example –among many- of ambush marketing by intrusion is when the non sponsor places banners or advertisements close to the event’s venues. Benefits of sponsoring Who benefits with sponsoring? Both, organizers and sponsors do. On the first hand, the organizers need sponsoring. In terms of sportive activities, sponsoring has become an essential part of the development of today’s sports and is one of the most fruitful means of revenue. Without the presence of sponsors, organizers of the major events such as the FIFA World Cup or the Olympic Games would not be able to obtain the sources of income to get the events going. On the other hand, sponsoring derives in many benefits for the sponsors as well, such as:
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Getting their marks, goods and/or services advertised during the event to a massive audience, sometimes worldwide Association with the image and principles of sports and with the sponsored activity The ability to tackle new commercial markets and public Obtaining the recognition of the public and an association with the sponsored event Benefit with the association with one or some of the heroes of today’s society, that is: sportsmen

Finally, the public and the cities hosting the event also benefit with sponsoring because same permits the audience to have a well organized event, increase the town’s commercial activity in the host country and, no less important, the city and its citizens will receive improved and sometimes new venues and better and new infrastructure, among other benefits. Combating Ambush Marketing Organizers always promise and sponsors expect to have the exclusivity in the use of the official event’s marks, logos, symbols and other forms of official designations. That derives in having unique publicity and/or promotional possibilities, on site concessions and the right to define themselves as the official sponsors of the event. Therefore, the grant of exclusivity to official sponsors is a must. There is no value to sponsorship with no such exclusivity. Consequently, organizers and sponsors necessarily need to ensure a control of the marketing practices connected with the event by all means possible. In this respect, Intellectual Property (IP) protection is extremely necessary for all organizers of major events as ambush marketing by association always involves elements of deception. Usually existing IP laws and Unfair Competition regulations are sufficient to control and punish these type of associations. However, the case is not as clear as to ambush marketing by intrusion because this type of activity not always infringes an IP right. As mentioned, in most cases ambush marketing advertisements and promotional campaigns do not refer to sponsor’s IP rights (trademarks mainly). Ambushers refer to themselves and to their goods and services in a crafty manner. Therefore, specific legislation is needed to combat this form of ambush marketing to which we shall refer as from now on.

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First, we shall give some examples of different forms of intrusion ambushing activities and thereafter we shall refer to some examples of said conduct which occurred in past major sporting events. Forms of ambushing activities displayed by non sponsors: • • • • • • • • sponsoring live and/or recorded radio/TV transmissions of the event acquiring advertisement spots during live and/or recorded transmissions of the event placing advertisements around the host city and/or nearby the venue or stadium which include images of the sport, venue and/or event which is about to take place or actually happening placing stands, flags, promotional personnel, etc. nearby the venues or stadiums giving out free merchandising around the venues and stadiums such as caps, flags, t-shirts, etc. promotions with tickets to the event or transportation in and out of the hosting city or town at the time of the event greetings to sportsmen or teams which are sponsored by competitors placing hot air balloons above the open venues

The legal status of some of the above mentioned activities will depend on the nature of same and the actual contractual relation between the sponsor and the event’s organizer and the local regulations. Examples of intrusion ambush marketing: • During the 1984 Olympics in Los Angeles, where Converse was the official sponsor, Nike built large walls close by the Los Angeles Coliseum and displayed the Nike logo with several athletes wearing the marks clothes; the ads could be seen from inside the Coliseum At the Atlanta 1996 Olympics, the winner of the 100 meters race, Linford Christie appeared at a press conference wearing contact lenses with the Puma logo in the center of same, when Reebok was the official sponsor of the event In the same Olympic games, Nike handed the public at the venue’s entrance, paper flags bearing the Nike logo, which were captured by the TV cameras in despair of Reebok, the official sponsor T-Shirts were handed out by the same firm during the 1992 Barcelona Olympic Games with the same effect
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Pepsi flew a hot air balloon over the Sharjah on the day of the Coca Cola Cup final On the other hand, Coca Cola launched its C2 refreshment by sponsoring 8 cars during the Pepsi 400 at the Daytona Speedway. Inside the track, Pepsi signs were seen but outside the venue, Coca Cola placed stands and banners everywhere Visa was the official sponsor of the Winter Olympics at Lillehammer (Norway) in 1994. and aired TV commercials were they claimed that American Express cards were not accepted at the Olympic Villa. However, American Express aired ads which stated that American travelers did not need any visa to travel to Norway

Having seen some of the examples of ambush marketing by intrusion, it is clear that non sponsors and ambushers gain from their intrusion activities because they advertise their marks, goods and/or services to massive audiences, potentially attacking new markets or commercial segments. They also benefit with the association the public will most certainly do with their marks and the event or the teams and sportsmen participating in same. Measures to combat Ambush Marketing What practices can organizers and sponsors adopt to combat both types of ambush activities and prevent its consequences? There are various alternatives to take to prevent the association and intrusion activities by non sponsors or, at least, improve the odds against them. The first thing to do is for the organizers to effectively protect –usually via trademark registrations- the official symbols and logos of the event, including the eventual mascot, if existing. This would be helpful to combat ambush marketing by association. The actual laws of most countries are not adequate to prevent ambushing activities. Most countries –including Argentina- still rely in their traditional IP Laws to protect sponsors against ambushers, however, these laws seem to be ineffective in most cases, due to the creativity of the ambushers and the way they circumvent those regulations. We have mentioned that intrusion ambush marketing needs special legislation regarding the protection of major sporting events. This specific legislation is a condition to be eligible as a host of the Olympic games, for instance. Sydney 2000
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were the first games in which this type of special and ad hoc legislation was put in practice and Athens 2004 followed. This kind of ad hoc legislation is an exception to the standard legal systems of each country and is designed to protect the major sporting event a particular city or country is to host. In general, the scope of this kind of regulation is limited to a certain event and does not apply to any other event or sports. The need for this type of legislation is recognized by the European Sponsorship Association (ESA). Other examples of ad hoc legislations are the ones adopted by Portugal for the UEFA Euro 2000 Nations Cup; the one adopted by Korea for the FIFA World Cup of 2002; the same status quo was granted in South Africa for the Cricket World Cup (where it is a criminal offense to gain promotional advantage for a mark by association with a certain event); in Germany for the Leipzig Winter Olympics; Australia for the 2003 Rugby World Cup and in London for the 2012 Olympics. Among other things, this type of legislation would regulate the way in which advertisements can be done, who can do so, where can the ads be placed and would limit the surroundings of the venues for protecting the exclusivity of the sponsors advertisements and promotional campaigns. In the case of FIFA, advertisement around the World Cup must comply with FIFA’s rights and those of its official sponsors without fail. Such legislation recognizes that there is a public interest that should be protected, despite the usual private interest involved and, thus, the official symbols of the event are reserved to the organizing committee and local authorities (i.e. Portugal). An alternative to the ad hoc legislations could be found in an extensive interpretation of art. 6ter of the Paris Convention in order to obtain the extension of the prohibition of registering and using State Emblems to the event’s distinctive signs. This alternative is actually existing in Canada. Other alternatives for sponsors and organizers to combat ambush practices can be: • • placing ads in the media informing who are the official sponsors control the photo and broadcast rights by the organizer as well as the souvenir hand out on site

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acquisition by sponsors of air timing in live and/or recorded broadcasting of the event acquisition of advertisement spaces close to the event’s venues within the realm of common sense sponsoring the transmissions of the event sending letters to the competitors well in advance to the event warning them who the sponsors are.

Cases in Argentina As in almost any other country of the world, there are not many cases of ambush marketing in Argentina, at least there is no judicial decision to the date this paper is finished. However, there are a couple of cases which are under discussion in Courts and another one which was not subject to any claim between the parties involved. We shall start with the latter one. This case happened during a series of rugby test matches between Argentina and France, which took place in Buenos Aires in June 2003. This series of two games was sponsored by a famous foreign brewery which advertised the series in the press and inside the stadium and also handled the trophy to the series’ winner. However, a local brewery placed advertisements all over the special Argentina-France test match edition of a highly spread newspaper which better covers the sport of rugby in Argentina. The advertisements of the local brewery –non sponsor- also appeared on the posters of such special edition. The public which did not know about which brewery was the official sponsor of the test match series, got confused when they read the special rugby edition on the following day’s edition of said newspaper. The foreign brewery did not file any actions against the local one. The Courts are soon to decide on the first case related to ambush marketing in Argentina in a case handed by the firm I am a partner with, which involves FIFA and Pepsico Argentina S.A. The latter was not an official sponsor of the FIFA World Cup of Korea-Japan 2002, instead, its main rival was. This matter arose before and during the cited event, when the latter decided to air a TV commercial involving several well known soccer players who were participating in a soccer match in a small soccer field and wearing jerseys bearing the “Pepsi” trademark under the banner “Tokyo 2002”. In addition to this, the opponents of the soccer players were Sumo Asian fighters.
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The ambusher –PepsoCo- cared to use the phrase “Tokyo 2002” instead of the registered trademark “Korea Japan 2002”, but the association to FIFA’s event was still clear as the latter was to be held partially in Japan and the real soccer players involved in the commercial were to take part in such event. Besides, the inclusion of the Sumo fighters in the commercial was clearly to mislead the public with respect to the involvement of PepsiCo regarding FIFA’s event. Moreover, the commercial was aired just a few days before the event started. FIFA sought a precautionary measure through our firm in order to obtain the immediate cease in the airing of said TV commercial by any means. The Court granted the measure to all effects because it found that said commercial suggested a presumed sponsorship relationship between the parties which did not exist in fact. This was the first precautionary measure of the kind obtained by FIFA anywhere in the world. Moreover, the snacks division of Pepsico Argentina S.A. further launched a line of potato chips bearing the blue and white colors and the word “Mundial” –Spanish translation of the registered FIFA mark “World Cup”-. Upon a similar precautionary measure the defendant was also ordered to cease in the use of said word in the packaging of its chips and Pepsico had to remove all merchandise from all major chains of stores and cease in the commercialization of said products. The issue of infringement is to be soon decided by the Court. Conclusion Any discussion around this issue would raise the question whether this practice is ethical or not. However, it is difficult to draw a conclusion. The answer would depend on who this question is asked to and the facts involved. What seems to be clear is that ambush marketing tactics constitute an ethical issue and a problem for sports organizers who must defend the sponsors which paid millions for the right to exclusively promote their marks, goods and services in association with the event against those who had paid nothing for such exclusivity. In any event, if ambush tactics are to be diminished or eradicated, additional legal tools must be adopted. © Ricardo Richelet III, 2006

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