Under pressure from organisers of the current Cricket World Cup, the South African Government has introduced strict new anti-ambush marketing laws. Osborne Clarke’s Sponsorship expert Nick Johnson looks at the implications for marketers in and beyond the world of cricket.
Topic: Sponsorship
Who: South African government, International Cricket Council
When: 17 January 2003
Where: South Africa
What happened
Following pressure from the organisers of the Cricket World Cup, the South African government has introduced legislation banning so called “ambush marketing” both before and during the tournament.
The Merchandise Marks Amendment Act 2002 is drafted in very broad terms to cover what the South African calls both “ambush by way of intrusion” and “ambush by way of association”. It means that directors of companies engaging in ambush marketing in South Africa could face lengthy jail sentences.
Under the new law, officially passed on 17 January 2003, the relevant government minister is empowered to designate an event as protected. Any unauthorised person who then uses their brand in relation to the event in a way which seeks to derive “special promotional benefit from the event” will be guilty of a criminal offence. Specifically, the Act states:
“(2) For the period during which an event is protected, no person may use a trade mark in relation to such event in a manner which is calculated to achieve publicity for that trade mark and thereby to derive special promotional benefit from the event, without the prior authority of the organiser of such event.
“(3) For the purposes of subsection (2), the use of a trade mark includes-
(a) any visual representation of the trade mark upon or in relation to goods or in relation to the rendering of services;
(b) any audible reproduction of the trade mark in relation to goods or the rendering of services;
(c) the use of the trade mark in promotional activities,
which in any way, directly or indirectly, is intended to be brought into association with or to allude to an event;……
“(4) Any person who contravenes subsection (2) shall be guilty of an offence.
“(5) For the purposes of this section ‘trade mark’ includes a mark.”
Why this matters
There is a long and distinguished history of brands running campaigns around sporting and other events without being official sponsors. Whether or not these activities should be seen as legitimate depends to a great extent on the nature of the activity and your own point of view.
Certain types of “ambush by association” are clearly hard to defend. For instance, if your marketing materials suggest wrongly that you have official sponsor status, then you can expect trouble (see the successful 2002 case in Argentina against Pepsi for running ads featuring the words “Tokyo 2002″ and various images and text which were said to suggest a “presumed sponsorship relationship”). And if you use registered trade marks without permission (eg FIFA WORLD CUP) then again you can expect some grief, regardless of any arguments as to whether this is “use in a trade mark sense”.
Likewise, any kind of “intrusion” ambushing which involves trespass on property or breach of ticket terms and conditions will tend to be problematic.
Other types of ambush activity however seem much less objectionable, particularly if you take the view that buying a sponsorship does not (and cannot) buy you the exclusive right to association with the event, but merely a right to official sponsor status plus a package of sponsorship rights.
Ingenious ambush concepts which have worked in the past but which would be impossible under the new South African legislation include:
- Indirect references to the event in advertising, like American Express’s campaign in the VISA-sponsored 1994 Winter Olympics in Lillehammer, featuring the slogan “If you are travelling to Lillehammer, you will need a passport, but you don’t need a Visa!”
- Placing ads on the outskirts of an event venue, like Nike have done a number of times around events sponsored by Adidas.
- Handing out flags to spectators before they enter the stadium (Nike again!).
- Calling yourself the “unofficial” soft drink/snack/newspaper of a particular event.
The position gets really worrying when you look at what might be called “ambush by parallel sponsorship”. With every big sporting event there are usually a significant number of sponsorships that may run alongside the main event sponsorship(s), not least sponsorships of teams/players and sponsorship of broadcast coverage. The new South African law may effectively prohibit these without the organiser’s prior consent.
The legislation will be great news for official event sponsors in South Africa, who will get much stronger rights for their money. It will also be great news for those South African events which are able to get themselves designated as protected under the Act. However, there are a number of fundamental respects in which the legislation goes too far:
- The use of criminal sanctions for what it is in reality a matter of commercial competition is simply not appropriate. There is nothing inherently dishonest about wanting to build a campaign for your brand around a sporting event and the threat of criminal convictions and jail sentences should not be available.
- South African broadcasters may suffer as the potential market for broadcast sponsorship of these designated events will be restricted to official event sponsors only.
Finally, there is one further very important concern. If allowed to stand, the new South African law will also introduce a significant distortion into the competition between different nations to host certain international events. Official sponsors may well seek to lobby organisers to locate events in South Africa with its stronger local rights for official sponsors. Countries like the UK which permit a certain level of “ambush marketing” will be put at a competitive disadvantage.
