Tackling Ambush Marketing: The Need for Regulation and Analysing the Present Legislative and Contractual Efforts

Abstract

The term ‘Ambush Marketing’ has assumed great importance in the modern advertising and marketing terminology. This essay aims to prove the need for regulation of Ambush Marketing practices. It examines instances of alleged ambushes and how these fit within a wider legal framework. Subsequently it will analyse the existing laws in various countries and evaluate their efficacy in tackling Ambush Marketing. Thereafter it will deal with the special legislative efforts taken by South Africa and Australia in tackling Ambush Marketing. This essay, before concluding, will also analyse and evaluate the contractual mechanism adopted by ICC (International Cricket Committee) to tackle Ambush Marketing.

Notes

 [1] Bhattacharjee, ‘Ambush Marketing – The Problem and the Projected Solutions vis-à-vis Intellectual Property Law’, 375–88.

 [2] Zimbo, ‘Ambush Marketing’.

 [3] Examples of this type of infringement are numerous. A recent US example is found in the case of Host Communications v Kellogg (1994), unreported, United States District Court of Kentucky, No.94-26, per Wilhoit, J. See also MasterCard International Inc v Sprint Communications Co. (1994) 30 USPQ 2d WL (US Dist.), as discussed in Verrelli, ‘Survey of Recent Developments in Sport’.

 [4] Townley, ‘The Legal and Practical Prevention of Ambush Marketing in Sport’, 335: ‘The “ambusher” who employs the tactics set out under this heading is likely to be a more sophisticated and commercially wily animal’, with typical examples of these activities including: unauthorized or unofficial merchandise; unauthorized or unofficial publications; unauthorized sales promotion activity; unauthorized broadcasts, virtual advertising, Web sites, live screenings, films, video, photography, telephone commentary, information lines, pager services; unofficial corporate sponsorship. Cited from Townley, ‘The Legal and Practical Prevention of Ambush Marketing in Sport’, 335.

 [5] See, for example, the National Hockey League v Pepsi Cola Ltd case infra, in this essay.

 [6] Gardiner, Sports Law , 509–11.

 [7] For example, both Qantas and Adidas, both non-sponsors, purchased television advertisements, which were shown during the coverage of the Sydney 2000 Olympic Games.

 [8] In June 2000, for example, Adidas launched a 12-part Olympics documentary series on the Ten Network, which featured ten Adidas-sponsored athletes.

 [9] Gardiner, Sports Law, 511.

[10] http://www.indiainfoline.com/bisc/ambu.html [cited 12 Dec. 2003]. See also, Gardiner, Sports Law, 509–11.

[11] For other examples, see Alexander Garrett, ‘Stick ‘Em Up – And Outwit the Sponsor’. The Observer (27 July 1996): 16.

[12] Meenaghan, ‘Ambush Marketing’, 81.

[13] Schlossberg, ‘Marketing – The Holes in Exclusivity’.

[14] Schlossberg, ‘Marketing – The Holes in Exclusivity’. See also, http://www.bakerbotts.com/news/printpage.asp?pubid = 13511711191999 [cited 21 Jan. 2004].

[15] ‘A marketing strategy whereby a non-sponsor attempts to capitalize on the popularity/prestige of a property by giving the false impression that it is an official sponsor. Often employed by the competitors of a property's official sponsors. Many in the sponsorship industry consider this strategy unethical.’ This is the definition of Ambush Marketing given by The Sponsorship Glossary of the Bonham Group. Quoted from http://www.bonham.com/inside/glossary.html [cited 12 Jan. 2004].

[16] Gardiner, Sports Law, 507.

[17] Crimmins and Horn, ‘Sponsorship’, 14.

[18] Jensen, ‘Some Sponsors Pass in Game Ads’, 3. Shortly after the 1998 World Cup, for example, Adidas announced that it would delay a decision on whether to remain an official sponsor after 2002 unless it could be assured that its investment dollar would be better protected.

[19] Whether it is the World Series, World Cup or the Olympic Games, sponsorship is big business. Some estimate that sponsorship rights for the 1988 Olympics yielded about $338 million in sponsorship fees. Indeed, it has been estimated that the total sponsorship for the 1992 Olympic Games was approximately $700 million, almost double the sponsorship fees for the same event just four years earlier. See http://www.bakerbotts.com/news/printpage.asp?pubid = 13511711191999 [cited 21 Jan.2004]. With this kind of money involved, concern over Ambush Marketing is but natural.

[20] Hardin, ‘Tragedy of Commons’, 1243.

[21] Hardin's article talks about a situation when shepherds who share a common pasture, overgraze it. Each shepherd doesn't incur all the costs of adding an additional sheep to the flock. Each additional sheep reduces the amount of grass available for the other sheep. The benefits to a single shepherd from grazing an additional sheep on the common pasture is enjoyed only by him, though the harm to all other sheep is borne by the shepherds as a group, and hence the negative utility is a fraction of the positive utility received through addition of the extra sheep. Hence every rational herdsman will consider it sensible to add one more sheep. But the same conclusion might be reached by all the shepherds using the common pasture, and therein lies the tragedy as this will lead to overgrazing and ultimate destruction of the common pasture.

[22] ‘Prisoner's Dilemma’ is one of the most basic models used to analyse collective action and common pool problems in Game Theory, a theory propounded primarily by John Neumann and John Nash. Game Theory provides us with new ways of looking at familiar problems. In many real life situations, we make decisions to achieve certain outcomes; in many of such situations however, we also have to interact with other decision makers and, as a consequence, the outcome depends not only on what we choose but also on what others do. Game Theory is a tool to model and thereby analyse situations involving interactions, and possibly, cooperation between several rational and intelligent decision makers. Prisoner's Dilemma has been extensively used in various ‘Tragedy of Commons’ situations like Bankruptcy Law – see, Baird, Game Theory and the Law , 188–201.

[23] Bainbridge, Intellectual Property , 521.

[24] (2001) RPC46 (HC). Quoted from http://www.pbpress.com/images/HOME%20AIP%202002/aIP0105.pdf [cited 21 Jan. 2004]. The article is in file with the author.

[25] http://www.legalday.co.uk/lexnex/simkins/simkins040603.htm [cited 21 July 2004].

[26] Narayanan, Copyright , 484.

[27] Section16 of the Act: ‘No person shall be entitled to copyright or any similar right in any work, whether published or unpublished, otherwise than under and in accordance with the provisions of this act or any other law for the time being in force.’

[28] http://www.china.org.cn/english/BAT/21504.htm [cited 21 Jan. 2004]. See also, http://www.murdoch.edu.au/elaw/issues/v8n2/kendall82_notes.html [cited 12 Dec. 2003].

[29] (1992) 92 DLR (4th) 349 (BC Sup Ct). For an excellent analysis of the cases and its possible implications in North America, see Bean, ‘Sports Sponsorship and the Lanham Act’, 1099.

[30] (1992) 92 DLR (4th) (BC Sup Ct), 349.

[31] (1992) 92 DLR (4th) (BC Sup Ct), 349.

[32] (1992) 92 DLR (4th) (BC Sup Ct), 352.

[33] (1992) 92 DLR (4th) (BC Sup Ct), 349.

[34] (1992) 92 DLR (4th) (BC Sup Ct) 356–7.

[35] See note 42 of http://www.murdoch.edu.au/elaw/issues/v8n2/kendall82_notes.html [cited 12 Dec. 2003].

[36] See above Note 26 at page 359.

[37] See H.P. Bulmer Ltd v J Ballinger S.A., [1978] R.P.C. 79 (C.A.). Cited in See above Note 29 at page359.

[38] See H.P. Bulmer Ltd v J Ballinger S.A., [1978] R.P.C. 79 (C.A.).

[39] [1972] 2 All ER 507 (HL). Quoted from See H.P. Bulmer Ltd v J Ballinger S.A., [1978] R.P.C. 79 (C.A.).

[40] Specifically, the Court held that while ‘the Coke NHLS agreement obligates NHLS, so f ar as it is able, to protect the rights of Coke from Ambush Marketing, such an obligation cannot impose on a third party a duty to refrain from engaging in advertising its products in a manner which, although aggressive, is not, by the law of Canada, unlawful... It may be that, due to Coke's failure to secure the right to advertise its product during the television broadcasts of NHIC and the securing of such rights by the defendant, the commercial value to Coke of the right to describe its product as the ‘official Soft Drink of the NHL’ has less commercial value than would have been the case if Coke had also obtained the right to advertise on NHIC. But that cannot diminish the defendant's rights.’ ([1972] 2 All ER 507 (HL) at 369).

[41] ‘Having viewed the television advertisements several times and read the printed material relating to the Contest, I am unable to say that the Contest suggests, to my mind, that the plaintiffs approved, authorised or endorsed the Contest in any way or that there was some form of business connection between the defendant and the plaintiffs. I recognize that my own perception may very well have been influenced by the trial itself. Accordingly, I attach little weight to it. The result, however, is that in respect of the Contest, there is neither evidence nor the appearance of passing-off.’ The judgment quoted from Note 31 above, at 364.

[42] See note 49 of http://www.murdoch.edu.au/elaw/issues/v8n2/kendall82_notes.html [cited 12 Dec. 2003].

[43] 30 USPQ 2d 1963 (SDNY 1994); 23 F3d 397 (2d Cir. 1994).

[44] http://www.bakerbotts.com/news/printpage.asp?pubid = 1405411191999 [cited 21 Jan. 2004].

[45] http://www.pbpress.com/images/HOME%20AIP%202002/aIP0105.pdf [cited 21 Jan. 2004].

[46] The Delhi high court dismissed an interim application by the International Cricket Council seeking to restrain Britannia Industries and its authorized departmental stores from using the logo, mark and mascot of the 2003 World Cup in their promotional schemes.

ICC Development International Ltd (ICCDIL), a company formed by the ICC to control its commercial rights, including media and sponsorship rights relating to ICC events, had alleged that Britannia and its authorized departmental stores were misrepresenting their association with them by using the World Cup logo and other marks etc on their promotional material without permission. The ICC-held company accused the Indian biscuit manufacturer of resorting to Ambush Marketing to take advantage of the World Cup without investing a single rupee.

The ICCDIL alleged that the scheme ‘Britannia Khao World Cup Jao’ amounts to an act of unfair trade practice in addition to depriving the authorized sponsors the enjoyment of the exclusivity granted to them by the ICC's company. ‘Ne ither the plea of Ambush Marketing is available to the plaintiff (ICCDIL) nor any of aforesaid decisions has any applicability of the facts of this case. Plaintiff, thus, must be held to have prima facie not even made case for issue of the ad interim injunction prayed for,’ Justice K.S. Gupta said. Quoted from http://www.rediff.com/cricket/2002/dec/04reject.htm [cited 21 Jan. 2004].

[47] (2003) 26 PTC 245 (Del).

[48] Bhattacharjee, ‘Ambush Marketing – The Problem and the Projected Solutions vis-à-vis Intellectual Property Law’, 381, footnote 46.

[49] Bhattacharjee, ‘Ambush Marketing – The Problem and the Projected Solutions vis-à-vis Intellectual Property Law’, 381.

[50] See, for example, Spalding Brothers v A.Gamage Ltd. (1915) 84 LJ Ch 449, EWBVenootschap v J Townend & sons Ltd. [1979] AC731. Naryanan, Copyright, 484.

[51] Bainbridge, Intellectual Property, 601.

[52] See Note 24 above.

[53] http://www.pbpress.com/images/HOME%20AIP%202002/aIP0105.pdf [cited 21 Jan. 2004].

[54] For details on these legislations see Bhattacharjee, ‘Ambush Marketing – The Problem and the Projected Solutions vis-à-vis Intellectual Property Law’, 382–3.

[55] http://www.bakerbotts.com/news/printpage.asp?pubid = 1405411191999 [cited 21 Jan. 2004].

[56] Sawant and Bandyopadhay, Advertising Law and Ethics, 5.

[57] Article 19,Universal Declaration of Human Rights.

[58] Hamdard Dawakhana v Union of India AIR 1960 SC 554.

[59] Hamdard Dawakhana v Union of India AIR 1960 SC 554.

[60] Hamdard Dawakhana v Union of India AIR 1960 SC 554, para 7, 8,14,17,18, 21.

[61] AIR 1986 SC 515.

[62] AIR 1986 SC 515, para 90 and 91.

[63] AIR 1995 SC 2443.

[64] AIR 1995 SC 2443, para 22.

[65] Article 19 of the Indian Constitution – Protection of certain rights regarding freedom of speech, etc. –

(1) All citizens shall have the right-

(a) To freedom of speech and expression;

(g) To practice any profession, or to carry on any occupation, trade or business.

(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of [the sovereignty and integrity of India,] the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.

(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, [nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevents the State from making any law relating to,

(i) The professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business, or

(ii) The carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise].

[66] (1941) 86 law Ed.1262 quoted from AIR 1960 SC 554 at 563–4.

[67] (1959) 358 US 498.

[68] (1975) 421 US 809.

[69] AIR 1986 SC 515.

[70] For the discussions, see generally, http://www.belldewar.co.za/news/articles_corpcompanyoratelaw/press_ambushmarketers.htm [cited 22 Dec. 2003]. And for the Australian perspective see generally, http://www.aph.gov.au/library/pubs/bd/1999-2000/2000BD052.htm [cited 21 Jan. 2004].

[71] See Bhattacharjee and Rao, ‘ICC on a Sticky Wicket – The Clause against Parasitic Marketing’, 94.

[72] The freedom under Article 19(1)(g), means that every citizen has the right to choose his own employment or to take up any trade or calling, subject only to the limits as may be imposed by the state in the interests of the public welfare and the other grounds mentioned in clause (6): as held in Saghir Ahmed v state of U.P. AIR 1954 SC 728.See also, Basu, Shorter Constitution Of India , 224, where he says, ‘The right to enter into a contract relating to property or business is a fundamental right guaranteed by Article 19(1) (g).’ Hence definitely, the fundamental right to livelihood of the cricketers would include participation in any advertisement or promotional activities of any company's goods or services.

[73] http://www.naavi.com/cl_editorial/edit_aug_27_02_01.html [cited 14 Dec. 2003].

[74] http://www.rediff.com/cricket/2002/aug/29dan.htm [cited 2 Dec. 2003].

[75] See Note 72 above.

[76] http://www.rediff.com/cricket/2002/aug/20prem.htm [cited 20 Nov. 2003.].

[77] http://www.rediff.com/cricket/2002/aug/20prem.htm [cited 20 Nov. 2003.] INTERNET.

[78] The clause is quoted below:

• The Squad Member shall not (from 30 days before the first Match until 30 days after the last Match in the Event), directly or indirectly allow his name, voice, image, likeness or other representation to be used either: (A) in any advertising or endorsement; or (B) for any commercial purpose; in any media whatsoever by or on behalf of a competitor of, or any product of any competitor of, any Official Sponsor, Global Partner or Official Supplier or which in either case involves a direct or indirect association with the Event and/or which seeks to exploit (whether implicitly or explicitly) any connection therewith without the prior written approval of IDI. For the avoidance of doubt the above prohibition shall cover (without limitation) the appearance of Squad Members in advertisements endorsements or other commercial activities wearing Team Kit, Team Uniform, Practice Kit or other national kit or any clothing confusingly similar to any of the foregoing.

Quoted from http://www.rediff.com/cricket/2002/aug/14form.htm [cited 28 Dec. 2003].

[79] Quoted from http://www.rediff.com/cricket/2002/aug/14form.htm [cited 28 Dec. 2003] INTERNET.

[80] http://www.rediff.com/cricket/2002/aug/29dan.htm [cited 20 Nov. 2003].

[81] http://www.rediff.com/cricket/2002/aug/29dan.htm [cited 20 Nov. 2003] INTERNET.

[82] http://www.rediff.com/cricket/2002/aug/14fais.htm [cited 28 Dec. 2003].

[83] McKenzie v Hardinge, (1906) 23 TLR 15. Quoted in Ratanlal and Dhirajlal, The Law Of Torts , 319.

[84] (1853) 2 E&B 216. Quoted from Heuston ed., Salmond On The Law Of Torts , 408.

[85] See generally, Heuston ed., Salmond On The Law Of Torts, 410 and Ratanlal and Dhirajlal, The Law Of Torts, 319–22.

[86] Greig v Insole (1978) 3 All ER 449 at 487.

[87] Merkur Island Shipping Corp. v Laughton (1983) 2 All ER 189 (HL) (196). Quoted from Ratanlal and Dhirajlal, The Law Of Torts, 321.

[88] South Wales Miner's Federation v Glamorgan Coal Co. [1905] A.C. 239. Quoted from Heuston ed., Salmond On The Law Of Torts, 412.

[89] http://www.rediff.com/cricket/2002/aug/20prem.htm [cited 21 Jan. 2004].

[90] See generally, Sayre, ‘Inducing Breach Of Contract’, 663.

[91] See Heuston ed., Salmond On The Law Of Torts, 412.

[92] (1988) 3 All ER801 (CA), quoted from Ratanlal and Dhirajlal, The Law Of Torts, 322.