Ambush marketing and trademark law in India

The word “Ambush Marketing” was first coined by marketing guru Jerry Welsh while he was working as a manager for American Express in the 1980s. This concept first came to light during the 1984 Los Angeles Olympics where American Express launched a campaign against their rival and the official sponsor of the event, Visa Inc. Companies have resorted to a similar marketing strategy in the recent times which have been considered unethical. But is “Ambush Marketing” legal? Such a marketing strategy affects the brand and trademark of the company but does it amount to trademark infringement? Such questions need to be answered and for that, we need to understand the concept of ambush marketing in relation to trademark law.

What is ambush marketing?

Ambush marketing is a form of marketing in which a company hijacks the marketing campaign of the official sponsor company to get more exposure to one’s product or service. Let us take an example where one is selling musical merchandise outside the concert venue without the permission of the promoters of the event. This will amount to ambush marketing. Now imagine a cricket match being sponsored by Adidas, but Nike tries to hijack the campaign by reserving the seats in the stadium so strategically that whenever the umpire is zoomed-in for the decision, people behind him display a Nike sign. An official sponsor who spent billions of dollars to get sponsorship will feel the heat when it’s competitor tries to market its own product by spending less and garnering the audience’s attention. The purpose of the whole sponsorship is shattered and that is why ambush marketing is considered unethical.

Ambush marketing typically targets major sports events like the Olympic games, FIFA world cup, ICC world cup, etc. It typically involves the unauthorised use of logos and designs in the event. It aims at misleading or confusing the audiences about who the official sponsors are.

Generally, there are 3 types of Ambush marketing[1]:

A) Direct Ambush marketing: The brand or the company that has no sponsorship or right in the event intends to associate themselves with the event. The best example would be of the 1994 FIFA world cup event in which the Sprint communication company used the logo of FIFA without the permission of FIFA organizers and MasterCard, the official sponsor of the event[2].

B) Indirect Ambush marketing: The brand tries to associate with the event through indirect means to seek people’s attention and promote their product. Generally, it is done through unconventional means that attract audience’s attention. There are many examples for such a campaign and one of the best known is that of Kodak v Fuji case[3]. In 1984 Olympic games, Kodak ran rigorous marketing campaigns stating themselves as the official sponsor of the event whereas Fuji films was the actual official sponsor of the Olympic games. Kodak sponsored the TV broadcast of the games, as well as the US track team to showcase itself as the official sponsor. Similarly, the 1996 Olympics, which was officially sponsored by Reebok, faced an ambush campaign by Nike when an American Olympian athlete named Micheal Johnson used Gold shoes sponsored by Nike in the field while running and took photographs displaying Nike shoes in the event. This became so famous that no one even remembered that Reebok was the official sponsor of that Olympic game[4].

The main difference between direct and indirect ambush marketing is that in indirect marketing, the aim of the marketing campaign is not to grab the main spotlight of the game which is done in direct marketing, but to work indirectly and steal the show by gaining more exposure for its brand through other means.

C) Incidental Ambush marketing: This happens when market communication of a company leads to the incidental ambush of an official sponsor company. For example, when a company unintentionally campaigns exhaustively in comparison to the official sponsor, such that the public starts believing it to be the official sponsor of the event. In other words, it is just an attempt to distract audiences from the event’s official competitive sponsor, by bombarding them with their own ads.

Ambush Marketing and Trademarks Act.

The purpose of the trademark law is to protect businesses from unfair competition by avoiding confusion to the consumer and giving exclusive rights and remedies to the trademark owner. It also aims at protecting the goodwill of the company. As per the Trademarks Act 1999, if an organizer of an event has a registered trademark and if that same mark or any similar or deceptively similar  mark is used by a non-official sponsor, the organizer of that event can allege trademark infringement under Section 29 of the Act. It can claim either an injunction or damage for the alleged trademark infringement. Section 29(1) of the Act reads as “A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trademark in relation to goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark.

Therefore, using the same or deceptively similar marks, logo or symbols associated with an event without a prior permission, will amount to trademark infringement. A notable case in this context would be of Arsenal Football Club plc v Mathew Reed[5], where Arsenal, a football club had registered a trademark for the word “ARSENAL” and a person named Mathew Reed was found merchandising with the Arsenal club logo. Reed argued that by using the logo it just showed its affiliation to the club and did not intend to misrepresent the trade origin, claiming it to be lawful. The European court rejected Reed’s argument and passed a judgement in favour of Arsenal.

It is to be noted that the Trademark Law of India deals with trademark infringement in cases where a trademark is used for creating confusion for the consumers or degrading the value of the mark by using same or similar trademarks. But, ambush marketing does not necessarily use the trademark of the competitor company instead uses its own trademark and strategies in such a way that the goodwill of the competitor’s brand is diminished.

With respect to indirect ambush marketing, there is no protection available in India. In case of ICC Development (International) Ltd. v. Arvee Enterprises and Anr[6], the High Court of Delhi dealt with the issue of ambush marketing. The facts of the case are that ICCDL was the organizer of the ICC world cup 2003 and it filed for a trademark on the word ‘ICC world cup’, logo and mascot. On the other hand, Philips organized a contest and used catchy slogans in campaigns like “Philips: Diwali Manao World Cup Jao ” meaning celebrate Diwali and go to the world cup. The ICC claimed that it had already filed an application for trademark registration and Philips was taking advantage without being a sponsor. It alleged that Philips was depriving the official sponsor of the event from the exclusive rights granted to them. The court rejected the contention of the petitioner on the grounds that Philips did not misuse the logo of ICC and the word ‘ World Cup’ is generic in nature. The court also rejected the ground of ambiguity claimed by the ICC and said that there was no assumption to consider confusion among the consumers regarding the official sponsor and the defendant. However, an injunction was granted by the court against the misuse of the ICC logo by the defendant.

As the cases related to ambush marketing are not properly dealt with by the current Act, there is a need for a proper legislation for the same.

Anti-Ambush Marketing Legislations in Different Countries

As more and more cases of ambush marketing are increasing, some countries have taken certain steps by enacting legislations to counter the same. In South Africa, the Trade Practices Act of 1976 expressly prohibits ambush marketing. Their Merchandise Marks Amendment Act, 2002 also gives power to the Ministry of Trade and Industry to declare certain events as protected events in South Africa. In Australia, the government in 2000 passed Sydney 2000 Games (Indicia and Images) Protection Act, 1996 to prevent ambush marketing and it has passed similar laws for hallmark sporting events. In New Zealand, the Major Events Management Act was passed in 2007 and its anti-ambush marketing provisions prevented commercial exploitation of organizers or event sponsors. The USA also protects the rights of the official sponsors under the Lanham Act. Similarly, China, Brazil, Canada and many more countries have taken proactive steps to prevent unethical use of ambush marketing.

Conclusion

Ambush marketing is considered an unethical practice but not illegal. Brand owners have a perception that if they ambush the market and draw the consumer’s attention to their product or service, they are benefited the most. But, this also discourages the event sponsor to consider sponsorship in events. Due to the absence of legislation, the ambushers tend to get away and repeat the act without bearing sponsorship commitment.

Therefore, India also needs a legislation to tackle ambush marketing as in coming years considering that it is expected to host major sporting events like the Olympic games. Sans such laws, India may face major challenges in future. However, to curtail the practice of ambush marketing in the absence of such legislation, it is advisable for event organizers to add and enforce anti-ambush marketing clauses in private contracts between themselves and sponsors. Still to get better protection from the losses caused by such loopholes in the legislations, sanction is required.


[1] Ms.Charul Agrawal, Ms.Jyoti Byahatti, Reengineering of Indian economy-Opportunities and challenges, Asia Pacific Journal of Research, Vol 3, October 2013

[2] Case C-206/01 ECJ 12/11/2002

[3]  Laura Johannes and Norihiko Shirouzu,Kodak vs. Fuji: Film War Erupts At the Nagano Olympic Games, The Wall Street Journal,03/02/1998

[4] Flashback // Michael Johnson’s Golden Nike Shoes, sole collector,09/08/2012

[5] Case C-206/01 ECJ 12/11/2002

[6] (2003) 26 PTC 245(DEL)

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Himanshu Sinha

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Himanshu is a 3rd-year student of Campus Law Centre, Faculty of Law, University of Delhi and he has pursued B.Com.(Hons.) from Hansraj College. He holds a key interest in IP Law.

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