Name – Abhijeet Mishra

Title - Ambush Marketing: Need for balanced approach vis-à-vis Intellectual Property Law
Contact - +91 9691500822
Email ID – abhijeetmishra42@gmail.com
Institutional Affiliation – Hidayatullah National Law University, Raipur, India
Address - Hidayatullah National Law University Uparwara Post, Abhanpur, New Raipur,
Chhattisgarh 492002

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 Abstract

Ambush marketing has been a matter of concern for the organisers of major sporting events
who have been demanding effective statutory protection for their marks, logos etc.,
associated with the events against unauthorized use by non-sponsors. This paper examines
the essential features of ambushing practices vis-à-vis common trademark infringement
claims and their impact on the sports events, its organisers and sponsors. Besides, it attempts
a critical evaluation of the effectiveness of the existing IP laws in preventing such practices
as well as the rationale and negative aspects of the event-specific legislations, otherwise
known as super-IP, enacted by the governments of host countries, apparently under pressure
from the transnational sports bodies, to extend protection beyond the provisions and scope of
existing laws. The analysis takes into consideration relevant case laws on different aspects of
the subject. In recommendations, the author argues that the event specific enactments are not
the appropriate remedy and, instead, suggests a series of legal measures to reconstruct the
existing IP laws by incorporating certain standard guidelines and doctrines drawn from
international conventions and national jurisprudence. The author also recommends a package
of non-legal measures that could be adopted for plugging the source of ambushing activities.
Ultimately, the author advocates a balanced approach keeping in view the need to reconcile
the competing interests of the sponsors on the one hand and legitimate commercial practices
and freedom of speech and expression on the other.

Keywords: Trademark infringement, ambushing practices, event specific enactments, super

IP, legitimate commercial practices, balanced approach

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 Introduction

Unprecedented rise in popularity of global sporting events has drawn well known corporates
to get associated with these events that are seen as great business opportunities. This trend in
commercialization of sports has led to the origin and growth of ambush marketing. Ambush
marketing refers to a promotional campaign by an organisation to associate its brand with an
event so as to gain recognition and commercial benefits from that association, undermining
the „exclusivity‟ of the official sponsor over the event. Essentially, the ambush marketer tries
to free ride on the commercial goodwill acquired by the event organiser and the sponsor.
Described by a variety of expressions such as 'parasite marketing', 'gorilla marketing' and
'viral marketing', these practices are perceived as a threat to the integrity of the event and
their potential to attract future sponsors that are vital to such sport events. 1

In the absence of statutory definition and with limited, and often conflicting rulings, it
has been difficult to establish infringement claims relating to ambushing practices. Since
traditional IP recourses such as trademark and passing off have proved to be largely
ineffective in protecting the exclusive rights attached to the event organisation and sponsors,
this paper suggests that the existing laws may be revamped by drawing lessons from
international conventions, national jurisprudence and other laws.

Adverse effects of ambush marketing: Fuji-Kodak (1984) to Beijing Olympics (2008)

The ambusher (non-sponsor) tries to capitalise on the efforts and investment by the
event organiser and sponsor and encroach upon their exclusive rights associated with the
event. In 1984 Olympics, Kodak, after losing out to its rival Fuji as the official sponsor,
retaliated by signing a deal to sponsor broadcasts of the Games. It proved to be a smart move
because the coverage of the event containing Kodak‟s ads was seen by far more number of
people than the live events. Further, Kodak also sponsored the US track team, leading many
people to believe that Kodak, not Fuji, was the official sponsor.The 1990 World Cup
Football, the Coca Cola – Pepsi war, where Pepsi outsmarted Coke, the sponsor of the games,

1
Burton. N, Conceptualizing Ambush Marketing: Developing a Typology of Ambush Strategy and Exploring
the Managerial Implications for Sport Sponsors, Unpublished PhD Thesis, Coventry University, 2012. Available
at https://curve.coventry.ac.uk/open/file/9bd69c07-2918-4b25-98c4-4654b44351c4/ 1/BurtonPhD2012.pdf

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by sponsoring the high profile Brazilian team is yet another example of free riding. This
modus operandi of ambushing got viral and assumed a more aggressive form in the
subsequent sporting events.

During the 1992 Barcelona Olympics, Visa, the official sponsor, obtained, as part of
its sponsorship package, the right that vendors of tickets and merchandise accept only VISA
cards. American Express promptly retaliated by its well-known campaign, “and remember, to
visit Spain, you don‟t need a visa”.2 This form of disparaging advertisement created a
confusion in the minds of public about the identity of official payment cards for purchasing
ticket and also created a false impression that American express was the official payment
card sponsor of the event.

The 1996 Atlanta Olympics was accompanied by parallel property ambushing, a

much more fined-tuned tactics by Nike which is often dubbed as the mother of all ambushes.
It involves creation of an event that bears qualitative similarity to the major event and
competes for public attention. It does not encroach upon the freedom of choice of audience as
they remain free to attend whichever event they find to be more attractive, but it does divert
sales and attendance from the principal event. In an effort to outbid the official sponsor and
arch rival Reebok, Nike took over an entire office block less than a mile from the Olympic
Park and turned it into a „Nike Village‟, equipped with facilities for the athletes and general
public, all of which blurred the status of Reebok as the official sponsor. By this move, Nike
saved USD 50 million towards official sponsorship fee.3 Similarly, in 2008 Beijing
Olympics, Nike organized a global contest called „human race‟ in 24 countries around the
world including Shanghai, the venue of 2008 Olympics, which continued for 7 days
following the Olympics, and turned it into a huge marketing opportunity for Nike. Ultimately,
this sort of marketing strategy does divert sales and attendance from the principal event.

On the whole, these marketing strategies adversely affect the sponsors‟ revenue
stream and also pose a serious threat to event organisers for attracting future sponsors for
their event.

2
Hugh G Hansen, Intellectual Property Law and Policy (Vol. 11, Bloomsbury Publication), [562]; Robert N.
Davis, “Ambushing the Olympic Games”, 3 Vill. Sports & Entertainment Law Journal, 423 (1996)
3
ArdiKolah, Essential Law for Marketers, (Ed. 1st , Butterworth Heinemann, 2002), [392]

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 Issues emerging out of ambushing practices

The contentious issues on ambushing could be broadly summed up as follows:

I. Effectiveness of the existing IP laws in protecting the exclusive rights of the event
organisers and sponsor?
II. Whether the alternative remedial measures i.e. ad hoc legislations are fully compliant
of the principles of fair use, competition law and free speech and expression?

I. Gaps in existing intellectual property laws

Since ambush marketing has not been precisely defined, event organisers and official
sponsors have tried to fit them into the pre-defined infringement claims under existing
trademark laws. However, these recourses have proved to be largely ineffective due to the
grey areas in the statutes along with their literal interpretation by the courts. This lacuna has
helped ambushers to successfully manoeuvre the legal provisions to their advantage to escape
liability.

A. Registered trademarks

Whereas conventional trademark claims rest upon the framework of competitive relationship
between parties, ambush marketing tactic is based on association linked infringement which
typically avoid referring to the protected or similar trademarks in advertising campaigns.
Thus trademark infringement is usually not attracted in such cases. For example, in Los
Angeles Olympics, the International Olympic Committee and Nike were not in direct
competition as the former was engaged in organisation of sporting events and the latter in
selling shoes. However, case laws show that ambushers are not always so discreet and at
times refer to protected trademark of official sponsors as in the famous case of Amex-Visa
war on Olympic sponsorship rights wherein the credit card companies referred to each other‟s
trademark i.e. „Visa‟ and „American Express‟ in their advertising campaigns. 4 In such cases,
the likelihood of confusion is obvious and protection is straightforward. In practice though,

4
Robert Goldman, Sign Wars: The Cluttered Landscape of Advertising, (Guilford Press, New York, 1996) [44]

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such cases are rare and, instead, ambush marketers refer to the event itself, often to the name
of the event organiser, thereby weakening the ambushing claim under trademark law.

B. Passing off

Passing off refers to sell of one‟s goods in the name of others. The key element of
passing off claims under trademark law is the likelihood of „confusion as to the source of
goods or services‟ which is different from the basic requirement under ambushing i.e.
„deceptive association of ambusher‟s brand with the event‟. In fact, in any major sporting
event, the consumers are not confused about the source of goods. Instead, they tend to
associate the marks with the event. Therefore, passing off claims are difficult to be
established against ambush marketer, as is evident from the court rulings.

In the Canadian case of National Hockey League v. Pepsi-Cola Canada Ltd.5 ,

although Coca-Cola had acquired the right to be the official soft drink, advertising rights
during television broadcasts of NHL games were purchased by Molson Breweries, who in
turn sold the rights to Pepsi. Pepsi organized a promotional contest titled „Diet Pepsi
$4,000,000 Pro Hockey Playoff Pool‟ inviting people to win prizes by answering questions
relating to NHL games printed on Pepsi products such as bottle caps and scratch cards etc.
NHL sued Pepsi contending that Pepsi was guilty of passing off because the television
commercials in particular conveyed a false impression to the public that the NHL, in some
form, approved or was associated with the contest. The Court of Appeal held that “the contest
promoted interest in the Stanley Cup Playoff, rather than deprecating the goodwill of NHL
and there was no credible evidence that any member of the consuming public would infer that
NHL was the source of the contest.” Thus the requirement of confusion as to source of goods
was missing.

Similarly in ICC (Development) International Ltd v. Arvee Enterprises & Anr. 6 , the Delhi
High Court refused to grant an injunction against Philips, organizing a contest promising free
travel to South Africa and tickets for the World Cup cricket matches as prizes thereby
creating an association with the games. The Court held that the marketing strategy by Philips
neither amounted to passing off nor was an unfair trade practice. The Court further observed
that „the concept of ambush marketing was used by companies to promote their brands and

5
National Hockey League v. Pepsi-Cola Canada Ltd., 42 C.P.R. (3d) 390, 1992 C.P.R. Lexis 1773
6
ICC (Development) International Ltdv. Arvee Enterprises & Anr., 2003 (26) PTC 245 Delhi

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the conduct in such cases could not be categorized as wrongful or against public interest and
thus not unlawful.‟

It is clear from these rulings that passing off, in its traditional context, covers
competitive business relationships, which does not capture deceptive commercial associations
practiced under ambushing. This is one of the reasons why the event organizers prefer to opt
for ad hoc legislations instead of fighting passing off claims that are difficult to prove.

C. Distinctiveness and dilution claims

Distinctiveness is the hallmark of trademark laws and dilution statutes generally protect well-
known names and marks, such as Coca-Cola, 
regardless of the presence or absence of
likelihood of confusion as to source of goods. However, case laws show that by and large the
event trademarks, such as „London‟ or „2012‟ or combination thereof „London 2012‟ as in
case of London Olympics, are merely “descriptive” and not “distinctive” and therefore
dilution claims are less likely to succeed in such cases. In the case of FIFA 2006, Germany,
the German trademark division (Bundesgerichtshof) reached different conclusions from
OHIM (Office for Harmonization in the Internal Market, European Union) in relation to the
trademarks “WM 2006” and “Fussball WM 2006”.7 It held that “in relation to a large
number of products and services pertaining to entertainment, cultural activities, organisation
of sport events, travel services for visitors, the trademark “WM 2006” was considered as
inherently descriptive of the event itself and therefore not a valid trademark.8 Despite the
factual monopoly of FIFA on the event, the relevant public would see in the registered
trademark only a reference to the event and not to the source. Therefore, the essential element
of the trademark i.e. distinctiveness was missing.” The key element of distinctiveness
disqualifies many of the event indicia from protection.

Thus, existing trademark law, even in its most expansive form, does not encompass
ambush marketing methods. This has prompted event owners to pressurize the governments
of host countries to enact specific legislations to prevent unauthorised commercial association
with events.

7
Decisions of April 27, 2006, I ZB 96/05 and I ZB 97/05, available at http://www.bundesgerichtshof.de/.
8
Nikki Ferguson, „FIFA tackles touts‟ Trademark World April 2006 18 at [19]

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 II. Specific legislations – “Super-IP”

The justifications advanced in support of event specific legislations are: (a) sponsors are vital
to sports events, (b) the exclusive marketing rights of official sponsor must be protected,
(c)unauthorised associations damage the image of the event(d) ambush marketing dissuades
the sponsors and thus jeopardize the future of sport. Such legislations have now become a
precondition for hosting a major sports event. In so far as these legislations extend protection
far beyond the parameters of intellectual property laws, and are driven by unaccountable
transnational bodies as against national governments, they are dubbed as super IP or IP plus
protection.

Negative aspects of super-IP laws

i. Discretionary powers

These enactments, quite often, contain provisions that are left open-ended, allowing the
organisers to capture all possible associations by using relatively vague concepts. Further, the
criteria of distinctiveness, non-descriptiveness as well as the procedures relating to pre-grant
and post-grant opposition are not followed. In most cases, the texts are not altogether
compliant with the provisions of competition law and do not provide for protection to honest
and concurrent users, which is an exception under trademark law.9 For example, the
Merchandise Marks (Amendment) Act, 200210 confers unfettered powers “to prohibit the use
of any mark, word, letter or figure or any arrangement or combination thereof, in connection
with any trade, business or event.” Taking shelter under this provision, FIFA, in 2010
Football World Cup, sought injunction to exclude everyone but FIFA and its mandatories
from using words such as „world cup‟ or numerals such as „2010‟ or every FIFA World Cup
logo ever used. The Minister rejected the plea and ruled that only recent logos and those
combinations of words that include references to both FIFA and to soccer or football are
protected. Similarly the Trade Practices Act11 , which was applied to ambushers in 2003 ICC

9
J. A. Fortunato & J. Richards, “Reconciling sports sponsorship exclusivity with antitrust law”, Texas review of
entertainment & sports law, Spring 2007, [33]
10
Section 15(1)(b), Merchandise Marks Act 17 of 1941 (S. Africa)
11
Section 52-53, Trade Practices Act 76 of 1976 (S. Africa)

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Cricket World Cup, gave event officials an arbitrary power to prohibit attendees from
bringing in beverages other than the official drink of the event i.e. Pepsi. 12

Yet another example is Ted Stevens Amateur Sports Act13 (ASA) that grants United
States Olympic Council (USOC) the absolute right to control the use of any Olympic-related
indicia by others.14 This Act does not require the committee to show any likelihood of
confusion as required by the trademark law to make a successful infringement case as to
ambush marketing.15

The Sydney 2000 Games (Indicia and Images) Protection Act also did not stick to the
criteria applied for granting trademark protection in so far as it covered a vast range of words,
logos and slogans that were clearly descriptive.16 In Baxter & Co. v. Australian Olympic
Committee17 , the Registrar found that the Australian Olympic Committee could not, under the
trademark law, claim to be the proprietor of the word „Olympic‟ as there was no evidence of
its use of the mark and held that „The established rights of owners of registered trademarks or
designs containing those indicia and images remain unaffected so long as the trademarks are
not used in a way so as to imply a connection to the Games.‟

In fact, these umbrella legislations have created new IP rights, which tend to not
only protect event owners‟ indicia in relation to the event but at the same time extend its
monopoly to every possible commercial activity that is not necessarily competitive.

ii. Encroachment on freedom of speech and expression

By prohibiting any form of publicity that does not match the rights conferred on the
organizers, these special laws are prejudicial to the freedom of expression of citizens and
enterprises.18 The Constitutional Court in South Africa has considered that insofar as the right

12
Edward Vassallo, et al., “An International Look at Ambush Marketing”, 95 Trademark Report. (2005) 1338,
[1349]
13
Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. §§ 220501–220529 (2011).
14
U.S. Olympic Comm. v. Intelicense Corp., 737 F.2d 263, 266 (2d Cir. 1984)
15
Ted Stevens Olympic and Amateur Sports Act, 36 U.S.C. §§ 220506(c) (2011), Edward Vassallo, et al., “An
International Look at Ambush Marketing”, 95 Trademark Report. (2005) 1338 at [1350]
16
Justin Davidson & Jessie McDonald, “Avoiding surprise results at Olympic Games”, Managing Intellectual
Property, Dec 2001/Jan 2002, 115, 22, [25]
17
Baxter & Co. v. Australian Olympic Committee, (1997) 36 IPR 621
18
A. Soldner, “Ambush marketing and the 2010 World Cup”, German South African lawyers association
newsletter, August 2006

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to freedom of expression could not be “disproportionately limited”, the Trademark Act had to
be “restrictively interpreted”.19

In R. v. Oakes20 , the Court held that “existing trademark law and laws relating to false
and misleading advertising already limit speech by preventing others from using an owner‟s
mark, or by limiting certain types of statements. Yet there are significant differences between
these laws and anti-ambush marketing legislations. Democratic societies accept that some
limits on the freedom of expression are permissible because they serve a legitimate and
important public purpose. The limits must, however, be capable of justification.”

In San Francisco Arts & Athletics v USOC,21 the US Supreme Court held that the
Amateur Sports Act is substantially overbroad in the sense that it grants discretionary powers
to regulate the use of their trademark in a way that denies even genuine defenses against
infringement of constitutionally protected freedom of speech.

iii. Legitimacy of super-IP legislations

In practice, these additional protections are driven by private bodies who have no ties with
the host country. The argument that anti-ambush marketing laws protect national, and local
investments in an event continues to be remote and debatable as the tax-benefits take away a
large chunk of earnings from the host country. Besides, the strong cartel of official sponsors
gives little opportunity to the local small and medium businesses in and around the grounds.
Further, some countries have gone a step further by inserting penal provisions against
ambushers under these Acts. This raises the issue of legitimacy as to the role of government
to enact ad hoc legislations that substantially expand its trademark laws solely for the short
term benefit and protection of private-run sports organisations and their official sponsors, at
the expense of interests of host‟s business community and citizens. 22

In view of these negative aspects, anti-ambush marketing legislations cannot be justified as a

19
Laugh it out Promotions CC vs. South Africa Breweries International and Another, Const. court of South
Africa., 27 may 2005, Case CCT 42/04
20
R. v. Oakes, [1986] 1 S.C.R. 103; Supreme Court of Canada
21
SFAA v USOC, 483 U.S. 522 (1987) at [588]
22
Steve Mckelvey, John Grady, “Sponsorship Program ProtectionStrategies for Special Sport Events:Are Event
Organizers OutmanoeuvringAmbush Marketers?”, Journal of Sport Management, 2008, 22, 550-586, [581]

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proper remedy for fighting ambush marketing activities. Hence the need for a balanced
approach.

Recommendations

As is evident from the above discussions, ambush marketing issues revolve around the
conflicting theories of coexistence versus the principle of competitive exclusion. Experience
has shown that the problem is not siloed; the problem cannot be addressed as merely a legal
or an exclusive marketing issue. The solution has to be a combination of legal as well as non-
legal measures.

Under legal measures, two sets of reforms are being advocated; first, greater role of
international conventions in preventing ambushing activities and second, reconstruction of
existing trademark law. Non-legal measures are in the nature of contractual arrangements
between the various stakeholders and awareness programmes.

A. Legal measures - Revamping the Trademark Law

i. Common application procedure

Protection under existing trademark law, being territorial in nature, the event organisers have

to file their applications for their marks, logos, and words etc., separately in each and every

country where the event is to be broadcast and also the future host. To cite an example, FIFA

had to file 45,000 applications for registering a single mark during 2010 world cup.

The complications involved in this process force the organisers to take a short cut by

pressurising the host countries to enact event-specific legislations giving "gross protection" to

a wide variety of generic and commercial expressions flouting fundamental principles of

trademark law. Besides, due to the huge popularity of these events through their worldwide

media and web coverage, protection of the indicia associated with the events can no longer be

confined to the host territory alone. Moreover event specific legislations provide temporary

protection whereas registration through the trademark law has the added advantage of

protection as per requirement of trademark owner. Hence, the need for putting in place a
uniform filing procedure.

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 The Madrid protocol/agreement23 provides for one single procedure for registration

of trademarks in several territories. This will help organisers such as IOC and FIFA to

simultaneously seek protection for their event brands in all those countries, which are the

members of this treaty. An international trademark application can be filed with the regional

or national office where the event organiser is headquartered such as Switzerland for FIFA.

Then it will be transmitted to the International Bureau of World Intellectual Property

Organisation (WIPO), where trademark examination and opinions would be scrutinized and

communicated to all the member countries‟ designated trademark offices. The designated

contracting parties will examine international registrations as per their laws and in case of

opposition communicate refusal to WIPO. This will help filter the non-distinctive and

descriptive marks, symbols and commercial expressions such as games, gold, silver, bronze,

numerical - 2010 etc. As a result, only those trademarks, which have acquired distinctiveness

due to the immense popularity and worldwide coverage of the event i.e. the Olympic rings,

word Olympics, abbreviations FIFA, ICC and their logo will get protection. 24 It will also
safeguard the legitimate commercial interests of businesses of the host country.

ii. Defining the scope of ambush marketing: Greater involvement of international

conventions

InRingling Bros. v. Utah Div. of Travel Dev. 25 ,the US Supreme Court held that „the law of
trademark is but part of a broader law of unfair competition.‟ However, the definition of
unfair competition is vaguely worded. For example Article 10bis of the Paris convention
describes unfair competition acts as “those, which are contrary to honest practices in
industrial or commercial matters.” It lacks clarity about essential elements necessary to
delineate those ambushing activities that fall under „dishonest practices‟ i.e. unfair marketing
or false association. It is therefore proposed to incorporate standard guidelines and doctrines

23
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks , June 27, 1989
(as amended on November 12, 2007)
24
Molly Torsen, Intellectual Property and Sporting Events: Effective Protection of Event Symbols through Law
and Practice, IIPI Report available at -
http://iipi.org/wpcontent/uploads/2010/07/Sporting_Events_and_Intellectual_Property.pdf
25
Ringling Bros. v. Utah Div. of Travel Dev, 170 F.3d 449, 459 (4th Cir. 1999)

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under international conventions to define the scope of ambush marketing so to guide the
member countries to deal with such cases effectively. Some of these are examined below.

a. Doctrine of “parasitism”

This theory is taken from French jurisprudence and refers to those who take advantage of
another‟s representation without authorisation even if the aggrieved party is not a competitor,
otherwise labelled as free riding. It is subject to fulfilment of three conditions: (i) the
reputation attached to the event‟s indicia must be the outcome of efforts and investments by
the event owner, (ii) the ambusher must take advantage of the goodwill of the event to further
its commercial activities, and (iii) the ambusher must not have made any effort to market its
product independent of any association with the event. This doctrine gained currency from
the ruling ofEuropean Court of Justice in L‟Oréal SA v. Bellure NV 26 that „EU law prevents
companies from taking advantage of the prestige of well-known marks in order to boost their
sales, even if the copycat products do not directly harm the owner of the marks or create
likelihood of confusion‟

This was applied in French National Olympic and Sports Committee (CNOSF) v.
Henri Maire.27 The ambusher, Henri Maire, a wine producer, reproduced on its bottle of red
wine, a flame, a medal and the word “olympisme” along with combination of Olympic
colours. The Court held that “Even if the Olympic symbols are not used in their protected
form, reproducing the colours of the Olympic rings, constitutes a tendentious presentation,
and the combination of these colours with other Olympic symbols, flame and medal, will
create confusion in the public‟s mind.” Thus, by using the Olympic symbols in a surreptitious
manner with a view to free riding on the reputation of the event, Henri Maire was held to
have committed an act of parasitism.

26
L‟Oréal SA v. Bellure NV,[2010] EWCA Civ 535; [2010] R.P.C. 23
27
CNOSF vs Henri Maire ; Tribunal de Grande Instance de Paris, 10 September 1997, PIBD, 1997, 642,
III,[586]

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 b. Misleading advertisements

This concept is borrowed from EU directives28 which defines misleading advertisements as

“any advertising which in any way, including its presentation, deceives or is likely to deceive
the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive
nature, is likely to affect their economic behaviour or which, for those reasons, injures or is
likely to injure a competitor.” It emphasises on the impact of ambusher‟s activity on the
consumer‟s decision making that causes harm to the event owner and official sponsor as a
key element. By applying this definition, ambush marketing claims would only succeed when
sponsors can prove that ambusher‟s commercial practice has appreciably impaired the
consumer‟s ability to make an informed decision. In other words, ambushing practices must
be shown to influence the consumer‟s decision to buy a product or a service because of the
quality and reputation attached to official sponsor that he would not have taken otherwise. To
cite an example, during the 1996 Atlanta Olympics Pepsi-Cola‟s advertisement used a picture
of Marie-José Pérec, winner of the 400 meters, with the slogan “Marie-José Pérec, official
representative of an unofficial Atlanta drink” could be termed as deceptive use of words to
influence consumer‟s decisions to buy more of Pepsi thinking it to be the official drink of the
event.

c. Doctrine of trademark injury – „concept of consumer harm‟

The trademark law is designed to facilitate a competitive marketplace by allowing consumers

to know the quality of goods they are buying and their source. To that end, it is supposed to

protect the integrity of marketplace by preventing deceptions that influence consumer‟s

decision-making. The anti-ambushing legislations are anchored on two sets of arguments.

First, market pre-emption argument assumes that the event owner owns not just the right to

use a mark in connection with a particular goods, but the mark itself, wherever it has value.

The second relates to free riding that takes for granted that no one else can use the event‟s

marks. As a result, the event owners are not required to demonstrate whether consumers are

in fact confused to their detriment by the ambushing tactic, thus, distracting attention from

28
Council Directive 84/450/EC of 10 September 1984 relating to the approximation of the laws, regulations and
administrative provisions of the Member States concerning misleading advertising, OJ L 250, 19.9.1084, p. 17.

14
the basic question of putative consumer harm. “In doing so, they have contributed to the

expansion of the trademark law beyond its traditional conceptual moorings.”29 Therefore,

there is a need to apply the „trademark injury‟ doctrine which is based on the „antitrust

doctrine‟ propounded by the US Supreme Court in Brunswick Corp. v. Pueblo Bowl-O-Mat

Inc.30 to weed out the facially appealing yet ultimately anti-competitive antitrust claims.

While doctrines of parasitism and misleading advertisement are rooted in the

argument of unjust gain to the ambusher and deceptive influence on the consumer

respectively, doctrine of trademark injury is based on consumer harm. The trademark injury

doctrine is based on the argument that harm to trademark owner is essentially linked to

„consumer harm‟ and proposes that the event organiser and the official sponsor would have to

prove that the consumers, by virtue of ambusher‟s action, have actually been misled into

believing that the ambusher is the official sponsor thereby negatively impacting their

purchasing decisions and causing harm to the consumers. In Warner Bros. Inc. v. Gay Toys

Inc.,31 the respondent created a toy car that was a look alike of General Lee‟s car used in

plaintiff‟s TV series “The Dukes of Hazard”. Plaintiff‟s survey put up as evidence before the

Court revealed that eighty per cent of the children had identified the “Dixie Racer” as the

“Dukes of Hazard car”, and assumed that the car was sponsored by Warner Bros.The Court

held that “the basic inquiry in an unfair competition action is whether the public is likely to

be misled into believing that the defendant is distributing products manufactured or vouched

for by the plaintiff, and that only proof of a likelihood of confusion or deception as opposed

to proof of actual confusion need be shown to obtain equitable relief.”

These doctrines can serve as useful guide for the member countries to reconstruct provisions

under their IP laws, incorporating definition and scope of ambush marketing.

29
Mark A. Lemley and Mark P. McKenna, Owning Markets, Michigan Law Review, Vol. 109, No. 2
(November 2010), pp. 137-189, [156]
30
Brunswick Corp. v. Pueblo Bowl-O-Mat Inc., 429 U.S. at 489.
31
Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d 76, 78 (2d Cir. 1981); United States Court of Appeals

15
 iii. Lessons from Lanham Act, 1946

The Lanham Act, 194632 subsumes the doctrines enumerated above and has addressed issues
substantially similar to those associated with ambushing practices. Section 43(a) of the Act,
makes a person liable against civil action if he “uses in commerce any word, symbol, marks
or combination thereof or false, misleading description of factswhich is likely to cause
confusion or to deceive as to the affiliation, connection or association of such person with
another person as to the origin, sponsorship or a licensee.” Thus, the provisions, reinforced
by judicial interpretations, are wide enough to extend protection against ambushing.

In Boston Athletic Association v. Sullivan,33 the defendant-ambusher, a retailer of

shirts, had used a combination of generic words i.e. "1986 Marathon", and not the event
organiser's protected mark, on its shirts. However, the Court held that “even though the
defendant had not used the plaintiff‟s marks, there can be no doubt that the language and
design on defendant‟s shirts intentionally calls attention to an event that has long been
sponsored and supported by the plaintiff.” The Court ruled in favour of the plaintiff (BAA)
holding that “the purchasers were likely to be confused about the sponsorship of defendant‟s
shirts, and that the defendant has thus violated the Lanham Act.”

The doctrines, concepts and ratio of the judgements lay down the essential ingredients and
scope of ambush marketing claims and can therefore be adopted internationally as a model
trademark law by other countries to curtail such activities. This will also overcome the
element of presumption of infringement associated with event specific legislations which are
violative of freedom of speech and expression. In fact, revamping of existing law is far more
expedient compared to the alternative solution of supplanting a whole range of event-specific
legislations to mitigate ambush practices.

32
Lanham (Trademark) Act, 1946, 15 U.S.C. § 1125(a)(1)(A)
33
Boston Athletic Association v. Sullivan, 867 F.2d 22 (1st Cir. 1989)

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 iv. Carving out exceptions

a. Commercial speech doctrine

Commercial speech has been described as "any communication or expression that

relates solely to the economic interests of the producer and the consumers.”34 A healthy and
efficient marketplace competition requires that all participants must have access to all those
words and symbols needed to communicate to denote their products‟ qualities and
characteristics effectively to consumers. Conferring broad rights to the event organisers to
use descriptive words and symbols may therefore lead to cases of commercial speech being
brought under infringing use in so far as it restricts the market participants‟ access to those
expressions.In Victoria Park Racing & Recreation Grounds Ltd. v. Taylor 35 , the Court had
ruled that “mere competition (certainly if without a motive of injuring the plaintiff) is not a
cause of action. Under the trademark law however there is no protection for practices which
are otherwise fair but are deliberately dubbed as ambushing practices by the event owners.
Therefore, it is proposed to lay down certain standards for determining „commercial speech‟
under trademark law with exception added for use of words in commercial speech for bona
fide traders and enterprises. This will ensure that market efficiency is protected by
unhindered flow of useful product information to consumers which will help them to take a
wise purchasing decision.

The doctrine of commercial speech is based on First Amendment‟s protection of right

to disseminate information36 and was laid down in Central Hudson Electric Corp. v. Public
Service Commission of New York.37 The protection under this doctrine is limited to truthful
and non-misleading advertising and extends to cases where the protected words or symbols
are used other than as marks i.e. used in their descriptive sense for informing the public as to
type of goods sold, its source, and for what reason. 38

In Ambercrombie & Fitch Co. v. Hunting World Inc.39 , the plaintiff held trademark
rights in the word “Safari” as a mark for shoes. However, the defendant sold the boots

34
Nicole B. Casarez, Don't Tell Me What to Say: Compelled Commercial Speech and the First Amendment , 63
Mo. L. Rev. (1998); Available at: http://scholarship.law.missouri.edu/mlr/vol63/iss4/2
35
Victoria Park Racing & Recreation Grounds Ltd. v. Taylor, HCA 45, (1937) 58 CLR 479
36
First Amendment of United States Constitution, December 15, 1791
37
Central Hudson Electric Corp. v. Public Service Commission of New York, 447 U.S., [562]-[563]
38
Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, (1976) 425 U.S. 748, [765]
39
Ambercrombie & Fitch Co. v. Hunting World Inc.,(1976) 537 F.2d 4, [12] – [13]

17
imported from Africa under the name „Camel Safari‟, „Hippo Safari‟ and „Safari Chukka‟.
While the defendant closely associated protected trademark “Safari” with its boots and other
products, and consumers may have understood this to have some connection with the
plaintiff, the Court however found it as a non-infringing fair use. It reasoned that the
defendant‟s application of the word “Safari” in connection with the boots it sold was for
descriptive purposes and not for purposes of garnering the plaintiff‟s business good will.

However the evaluation of this exception is important when commercial enterprise

uses event‟s indicia or associate with the event. While doing so the event owners have to
prove that their trademark has been used in commercial sense by the competitor. In National
Football League v. Coors Brewing Co. 40 , it was contended by defendant that it used the mark
NFL in its advertisement phrase to describe the players of the league and the official beer and
thus it came under commercial speech. However, the court held that the defendant wanted to
capitalize on the goodwill inherent in NFL trademark and simply focused on the endorsement
and marketing power of the mark and not in its descriptive sense. Therefore, if indicia is used
in a descriptive sense ambushing claims cannot be sustained.

In KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.,41 the Supreme Court

held that as a general matter, sellers‟ ability to use descriptive words and symbols in
communicating the qualities and characteristics of their goods to consumers is of greater
public concern than preventing all consumer confusion. Therefore an exception should be
added under the existing law for use of words in commercial speech for bona fide traders and
enterprises.This will ensure that market efficiency is protected by unhindered flow of useful
product information to consumers which will help them to take a wise purchasing decision.

b. Free speech

The following exceptions42 should be added under trademark law for honest and bona fide
commercial and business enterprises:

40
National Football League v. Coors Brewing Co., 1999 WL 1254122 at [1] (2nd Circuit, December 15, 1999)
41
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., (2004) 543 U.S. 111, [121] – [123]
42
International Trademark Association, Board Resolution: Ambush Marketing Legislation, November 10, 2010;
available at - http://www.inta.org/Advocacy/Pages/AmbushMarketingLegislation.aspx

18
 i. Use of indicia or marks for genuine reporting of news or current affairs in TV, books,
magazines, journal in relation to major events, where the use is reasonable and does
not indicate any false or misleading association with the event or the official sponsor.

ii. Use of mascots or any other protected work for the purpose of comment, critique or

parody to the event by any organisation in news, songs, movies or similar media.

iii. Use of indicia in accordance with honest practices in industrial or commercial matters

such as for describing its own goods and services, place of geographic origin, own
existing trademark etc.

With these kind of reasonable exceptions under trademark law, the rights of commentator and
critics would be protected and would help create a space for legitimate comment and
criticism about events.

B. Non-Legal measures

In addition to the legal measures suggested above, there are a series of practical steps that
event organisers and sponsors can take to avoid occurrence of these practices without
violating the provisions of competition law.43 Some of these are listed below:

i. To prevent parallel property ambushing in and around the sport stadia, event
organisers may enter into agreement with stadia owners to monitor and control
advertising in the vicinity. The terms may include establishment of clean sites i.e.
cleared of all advertising by unofficial sponsors.

ii. Event organisers may, in their official sponsorship package, include advertising rights
during live coverage of the event subject to the condition that these rights are
proportionate and subject to applicable competition law considerations.

iii. Event organisers should put in place effective licensing arrangements use of their

43
International Trademark Association, Board Resolution: Ambus h Marketing Legislation, November 10, 2010;
available at - http://www.inta.org/Advocacy/Pages/AmbushMarketingLegislation.aspx

19
 protected indicia by the official sponsors. Event sponsors should ensure that event
organisers are contractually bound to take action against ambush marketers within a
set period of time after such activity is brought to their attention.

iv. Event organisers and sponsors should undertake official sponsor-awareness

campaigns. The sponsors may seek to contractually oblige event organisers to run
such campaigns and ensure that they are prominently identified as the only official
sponsors in all literature and advertising surrounding the event.

v. Terms and conditions of sale of tickets must be proportionate and not conflict with
competition law and must be transparently displayed on the tickets so as to curb
sweepstaking by unofficial sponsors. Further, the rights of promotional activities must
be restricted to the official sponsors and partners.

vi. Event organisers should ensure that all names, logos, slogans, and so on connected
with the event in question are registered as trademarks.

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 Conclusion

The goal of the Olympic Movement is to “contribute to building a peaceful and better world
by educating youth through sport practiced without discrimination of any kind and in the
Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and
fair-play”

The spirit of Olympic movement runs counter to the arguments favouring IP

legislations i.e. additional protection ensures more sponsorships. Indeed, this raises the
fundamental question of legitimacy of use of coercive power of the state to protect a private
body‟s commercial rights. The Courts have also flagged certain critical issues relating to
safeguarding freedom of speech and expression and respecting competition law principles
with respect to these enactments. It must be remembered that the goodwill attached to the
event is the result of collective efforts of a large number of stakeholders and the event
organiser and the sponsor should not be confused to be the owner of the event. Thus, while
the anti-ambushing measures suggested in this paper appear feasible, it will depend on a
change in orientation, a proactive mind-set and collective efforts on the part of the host
countries, international organisations, transnational sports bodies and event organisers. They
have to rise above the tunnel vision of looking at the problem as a competition issue or
rivalry between competing brands and, instead, consider it from the larger perspective of its
impact on the sport event, in the light of ideals of the Olympic movement.

The initiative for implementing the measures has to come primarily from the sports
bodies and national governments. While consensus building among the stakeholders may take
time, sensitisation programmes about the existing IP laws and the need for revisiting the ad
hoc laws at the national government level could be kick-started.

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