Journal of Sponsorship Volume 3 Number 4

Legal and regulatory update Fighting for what is left of exclusivity: Strategies to protect the exclusivity of sponsors in the sports industry

Christopher R. Chase* and Rick Kurnit Received (in revised form): 8th April, 2010 *Frankfurt Kurnit Klein & Selz PC, 488 Madison Avenue, 10th Floor, New York, NY 10022, USA Tel: +1 (212) 826 5568; Fax: +1 (347) 438 2124; E-mail: [email protected]

Christopher R. Chase is a senior associate with the year of two of the world’s largest sporting Frankfurt Kurnit Klein & Selz, where he practises events (the 2010 Winter Olympics and the intellectual property, entertainment and advertis- 2010 World Cup), marketers are looking for cre- ing law. He counsels individuals and entities in ative ways to associate themselves with high-pro- the sports, entertainment and advertising indus- file properties and events, in both official and tries on all aspects of their businesses, specifi- unofficial capacities. To ensure that a marketer cally focusing on trademark, copyright and right receives the benefit of an official sponsorship with of publicity matters. His diversified practice exclusive rights, sports properties must take steps includes structuring and negotiating sponsor- to protect against ambush marketing and other ship, licensing and endorsement agreements, unofficial competitive marketing efforts that and advising on promotional and branded enter- dilute the value of the official sponsor’s rights. tainment matters. For example, sports properties may consider pur- chasing all advertising space at or near an event Rick Kurnit is a senior partner with Frankfurt location, require event hosts to work with local Kurnit Klein & Selz. He has over 30 years’ expe- governments to establish ‘clean zones’, or pursue rience in advising the advertising and marketing litigation against ‘ambush’ marketers. At the industry, representing advertisers, advertising same time, official sponsors must protect them- agencies, public relations and promotion com- selves when negotiating the sponsorship agree- panies. He has been selected by Best Lawyers in ment to ensure that their rights will be protected. America in both Advertising Law and Media Moreover, sponsors should leverage the rights Law; ranked in Band 1 by Chambers USA; received in an official sponsorship to make their ranked first by Legal 500; and selected by Law marketing stand out. This paper demonstrates and Politics magazine as one of New York’s that if both parties act in concert the sponsorship ‘Super Lawyers’ in First Amendment, media, relationship can be fruitful. advertising, and intellectual property. Rick is also Vice Chairman of the American Bar Association Committee on private advertising litigation. Keywords: sponsor, sponsorship, exclusivity, ambush marketing, ABSTRACT sponsorship agreements, sports In a tighter spending environment, and during marketing

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INTRODUCTION sponsors’ exclusivity, sponsors cannot Each year, brands spend hundreds of mil- always rely solely on the properties and lions of dollars on sports sponsorships,1 must themselves take action to protect designed to tap into the excitement and their rights. passion of sports fans by leveraging the association with sports properties. With a sponsorship in the sports industry, brands PROPERTIES SHOULD DEVELOP are able to expand consumer recognition EFFECTIVE STRATEGIES TO and align themselves with key demo- PROTECT SPONSORS’ EXCLUSIVITY graphics. The target audiences that sports In order for a property to maintain the properties retain are often the same audi- value of what it can offer to sponsors, it ences that brands covet. must protect the rights granted to sponsors As reflected in the amount of money through official sponsorships, primarily the spent on sports sponsorships, brands value exclusivity offered through such sponsor- the affiliation with sports properties, ship. Sponsors pay top dollar to maintain whether an event, a league, a team or an overall or category exclusivity in connec- individual performer (throughout this tion with sponsorship of a property. One of paper, these rights holders will be referred the main problems that leads to an erosion to as the ‘property’ or ‘properties’). The of sponsor exclusivity, and thus the value of properties see the value as well, and rely a sponsorship, is ambush marketing.2 on sponsors to help fund and further the ‘Ambush marketing’ generally refers to commercial goals of the property. marketing and promotional activities by Because of this incredible amount of third parties unaffiliated with a property spending, properties should protect the that seek to misappropriate or take advan- value of their sponsors’ rights. One of the tage of the goodwill, excitement and popu- most valuable rights for a sponsor is exclu- larity generated by the property.3 Ambush sivity — the ability to be one of the few, if marketing can be categorised in two gen- not the only, brand to align itself with a eral forms: ambush marketing where an property. Such exclusivity is a primary unaffiliated party seeks to capitalise on the selling point for properties when seeking goodwill or popularity of a particular prop- sponsorships, and with sponsors paying erty by association without obtaining the millions of dollars a year to be associated authorisation of or rights from the prop- with a property, protecting this exclusivity erty, and the more offensive type, where an is key. Otherwise the properties’ value unaffiliated party seeks to weaken a spon- proposition to sponsors will be damaged sor’s official association with a property, by and sponsorship dollars may go elsewhere. confusing the consuming public as to Especially now, in a tightened spending which party is the official sponsor. environment, properties must vigorously Marketers continue to look for cost- defend their sponsors in order to protect effective ways to tie into prominent prop- the value of the sponsorship. erties. With ambush marketing, marketers This paper will focus on strategies for attempt to associate themselves with a properties to protect sponsors’ exclusivity, property without the expense of paying a primarily from attacks by ‘ambush’ mar- sponsorship fee. This undermines the keters. It also offers steps that sponsors can value of the investments made by official take to help secure the benefit of their sponsors. Additionally, ambush marketing bargain. While sponsors often believe that harms a property’s bargaining position for it is the property’s responsibility to protect sponsorships: if potential sponsors know

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that their exclusive sponsorship rights will tion will advertise on billboards, buses, be diluted, they may find that there is less subway platforms, telephone booths and value in the sponsorship.4 It is therefore other out-of-home media near or outside imperative for a property to protect its of a stadium, along a race route, or any- sponsors, and thus, the value of the spon- where else in the host city of a high-pro- sorship itself.5 file event.7 More aggressive manoeuvres include skywriting and flying airborne banners or huge inflatable objects over the EXAMPLES OF AMBUSH MARKETING location of the event. Such advertising will OF SPORTS PROPERTIES be seen by the multitudes of event atten- There are a number of ways in which dees, and may even be picked up on the marketers will seek to associate themselves television broadcast of the event. with a property or ambush an official Advertising at or near the event location sponsor of a property, including the fol- can be very successful, as non-sponsor lowing: Nike showed at the 1996 Olympics, where it plastered Atlanta in billboards, handed Broadcast advertising out banners at the competitions and Marketers that are not official sponsors of a erected an enormous Nike-themed tent property can still purchase broadcast adver- near the main stadium.8 Following these tising time before, during and after the Olympics, many consumers thought that broadcast of an event. A common form of Nike was an official sponsor of the games. marketing, such purchases may be simply made by marketers seeking high visibility Unofficial promotional items during an event but could also be made to Marketers may offer free or low-priced imply a connection to the event, in order to goods such as t-shirts, banners, flags or hats undermine and devalue the rights of the near the event so that those inside the official sponsor of the event. A non-sponsor arena are wearing or waving the logos or of the property may even be able to use a advertising message of that marketer, designation such as: ‘X Company is a proud which may end up on the television sponsor of Y Network’s broadcast of Z broadcast of the event. For example, event’, which, depending on the number of during the 2006 World Cup in Germany, television viewers, may even be more valu- non-sponsor Bavaria Brewery distributed able than sponsoring the event itself. One lederhosen to fans of Holland’s national of the first examples of this type of market- team9 While these goods used the national ing was by Kodak at the 1984 Summer team’s primary orange colour, they also Olympics, where, due to its sponsorship of exhibited the logo of Bavaria Brewery. In a range of media channels and the US track order to protect its official beer sponsor team, many perceived Kodak to be the offi- Anheuser-Busch, FIFA officials at the sta- cial sponsor rather than Fujifilm, which dium where Holland was playing made all actually purchased the official Olympic fans entering the stadium remove their sponsorship rights after Kodak turned them Bavaria lederhosen, leading to thousands down.6 of Dutch fans watching the match in their underwear.10 Advertising at or near the event A high-profile event is also an excellent location location in which to offer samples of Marketers seeking to capitalise on the high goods, which could conflict with official visibility of messaging near the event loca- sponsors of a property.11

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Use of generic names or themes in the USOC’s financial means to ensure advertising that America’s athletes are given the best Marketers may create promotional materi- chance to perform to their best potential als that reference the property in generic on the field of play’.15 terms in order to avoid liability for trade- A further example of ‘generically’ mark infringement. Common examples themed advertising was the distribution of include the use of the ‘big game’ or the ‘Fan Cans’ by Anheuser-Busch prior to ‘championship’ to refer to a major sporting the 2009 college football season.16 This event like the Super Bowl. campaign featured Bud Light beer cans Savvy marketers will also use a generic adorned with local schools’ team colours. theme that may associate the marketer For example, Anheuser-Busch offered with the property without an explicit use purple and gold cans in Louisiana and of the property’s rights. The Olympics are maize and blue cans in Michigan, mimick- fertile ground for this type of marketing. ing the school colours of Louisiana State For example, during the 2008 Summer University’s and the University of Olympics broadcast on NBC, Vizio ran Michigan, respectively. Although the cans television advertisements promoting its did not specifically use the schools’ names HDTVs by showing an athlete diving or trade marks,17 the intent of the cam- into a pool against the backdrop of a paign appeared to be to associate the large American flag while a family brand with the schools’ fans.18 watches on a Vizio HDTV, much to the ire of Panasonic, the official worldwide Use of a city or country name audio and video partner for the Seeking to capitalise on the location of a Olympics.12 Additionally, prior to and high-profile event, marketers will create during the 2010 Winter Olympics, both materials using the name of the event’s Subway and Verizon Wireless ran adver- host city or country. Again, the Olympics tisements showing their association with also attracts this type of marketing. For certain Olympic stakeholders rather than example, in 1984, Nike blanketed the the official US Olympic Committee Olympics host city Los Angeles with the (USOC), upsetting official USOC part- marketing message ‘I Love LA’, at the ners McDonald’s and AT&T, expense of the official sponsor Converse. respectively.13 In Subway’s case, it ran a Perhaps more notably, American Express television advertisement featuring challenged Visa’s exclusive rights at the Olympic gold medalist Michael Phelps 1992 Summer and 1994 Winter Olympics swimming his way towards Vancouver, by running advertisements stating: ‘And ‘where the action is this Winter’. remember, to visit Spain, you don’t need a Verizon’s television advertisements touted visa’ and ‘So if you’re travelling to Norway, the company’s sponsorships of the US you’ll need a passport but you don’t need speed skating team by showing a US a visa’.19 speed skater being pulled to victory by Marketers’ use of the location name the power of Verizon’s 3G wireless net- plus the year of the event could veer into work.14 The USOC contacted both trademark infringement, particularly with Subway and Verizon Wireless and, with- Olympic host cities.20 out specifically naming either, publicly Such marketing is not, however, lim- admonished both companies by issuing a ited to the Olympics. For example, in statement that ambush marketers ‘damage advance of the 2010 Boston Marathon, official Olympic sponsors and undermine non-sponsor New Balance covered the

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city of Boston with billboards featuring WAYS FOR PROPERTIES TO the slogan ‘Run Faster Boston’, where MONITOR AND PREVENT AMBUSH the ‘N’ in the word ‘Boston’ was the same MARKETING as that featured on a New Balance To protect their sponsors, and justify the sneaker.21 high costs of the sponsorship, properties should take action to prevent ambush Congratulatory, good luck or other marketing before it happens or stop it support advertisements when it does happen. There are a number Marketers will also run advertisements of ways for the property to combat offering good wishes to a team or athlete, ambush marketing, including the follow- or even a country, in an attempt to associ- ing: ate with a high-profile property. This can occur before an event in the form of a The purchase of all advertising space good luck message, or after an event in the and media time form of a congratulatory message.22 To control the marketing messages near an event location, the property can pur- Use of event tickets for promotional chase all advertising space around and purposes near the venues where the events will Non-sponsors will often use event tickets take place.24 The property could then in sweepstakes, contests or other consumer offer that advertising space to official giveaways to promote themselves. The sponsors, or at least not offer it to com- non-sponsor will be likely to avoid using peting sponsors. Additionally, if the prop- the official trade mark of the property or erty has control over advertising during the specific event when advertising the the broadcast, it could require that no giveaway (such as ‘the Big Game’ rather advertising competitive to that of its offi- than ‘the Super Bowl’) or will include a cial sponsors be shown during the cover- disclaimer as to the company behind the age of the event, or require that the promotion in order to avoid a trademark broadcaster give a right of first refusal for claim. Despite the fact that the licence the purchase of advertising time to the language on the ticket back generally pro- property’s official sponsors. The property hibits such marketing use, this type of itself could even purchase all of the ambush marketing often occurs. broadcasting advertising space and offer it to its official sponsors. For example, the Sponsorship of individual teams Union of European Football Associations or athletes purchases and controls all advertising Another common marketing tactic is to time during its sanctioned football sponsor an individual team or athlete, matches, and then allots that time to offi- rather than the league or the team as a cial sponsors.25 Of course purchasing whole. Such tactics can be quite effective. advertising space, whether on television, For example, according to the Vice in print, or in out-of-home form is an President for Marketing of AirTran expensive proposition, but one that may Airways, the airline’s endorsement deals be covered by including such costs within with individual players on the Atlanta the official sponsorship fee. The control Falcons in 2008 convinced many people over advertising offers great advantages to that the Falcons were aligned with AirTran, the properties, however; not only would rather than the team’s official sponsor at such action clear up potential ambushers, that time, Delta Airlines.23 but it also offers official sponsors the

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opportunity to better leverage their spon- reminding such entities of the properties’ sorship through such controlled advertis- rights and the exclusivity granted to offi- ing media. cial sponsors. These letters often warn potential ambush marketers to respect Require event host locations to official sponsors by not using the proper- establish ‘clean zones’ ties’ trade marks in marketing materials or Properties should work with the govern- stating or implying that their goods or ments of event host locations to establish services are associated with the properties. a ‘clean zone’ near the location of the Both the NFL and FIFA are known to event leading up to and during the time send these types of letter to non-sponsors of the event. Such clean zones could be in order to protect their rights in such established by the passage of temporary properties’ marquee events, namely the local ordinances, and would restrict Super Bowl and the World Cup.27 unauthorised commercial advertising and the sale of unauthorised merchandise Maintain strict control over near the event location.26 However, for event ticketing events with dates and locations that are By maintaining strict control over event unknown until a few days before such tickets, properties can prevent non-spon- events begin, such as the World Series or sors from using tickets as promotional Stanley Cup playoffs, passing temporary prizes or giveaways. Properties can do so ordinances is not feasible, and in those by using ticket licence language prohibit- circumstances properties should work ing such unauthorised uses. with local, state and/or federal law enforcement in each event market to Legal action enforce whatever combination of anti- Finally, properties can take legal action counterfeiting, vending/permit or tres- against ambush marketers. To assuage the passing laws suits the properties’ purposes concerns of both current and future spon- in that event market. sors, properties should do as much as they can to demonstrate a harsh stance against Public relations activities ambush marketers. By enforcing their Properties can create a public education rights regularly, properties can show campaign to emphasise the relationship ambush marketers that they take such between the sponsorship fees paid to the issues seriously. property and how such fees benefit the Although most ambush marketing cam- event and the participating athletes. This is paigns exist in a legal grey area, there are effective in the Olympic context, where several legal claims under US law that funding for US athletes often comes from properties can make against ambush mar- corporate sponsors. Creating a public edu- keters. First, properties can bring a trade- cation campaign is a non-legal and non- mark infringement claim under the contractual way for properties to remind Lanham (Trademark) Act for the unautho- consumers that they should avoid or rised use of a property’s registered trade ignore ambush marketing tactics. marks;28 however, such a claim is unlikely to be available as ambush marketers are ‘Reminder’ letters often savvy enough not to use the official Similar to the public relations activities trade marks or other intellectual property noted above, properties can send advance rights of a property. Properties can also warning letters to non-sponsor marketers, bring unfair competition claims for false

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association, false authorisation, or false exclusive marketing agency Soccer United advertising under the Lanham Marketing (SUM) sued Black & Decker (Trademark) Act.29 All such claims under (B&D) for a long-running campaign by the Lanham Trademark Act involve claims B&D’s DeWalt line of power tools target- of confusing or misleading the public.30 ing Hispanic Americans in order to pro- Additionally, properties can bring unfair tect the rights of MLS and SUM’s competition claims under state law,31 such exclusive power-tool sponsor Makita.34 as unfair competition laws similar to the DeWalt’s campaign allegedly included federal Lanham (Trademark) Act and giving away tickets to MLS matches and claims for breaches of those laws estab- matches featuring the Mexican national lished to create a clean zone as noted soccer team (which is represented in the above. USA by SUM) for purchases of DeWalt Finally, properties can bring a claim tools, setting up product display tents near against ambush marketers for breach of such matches, offering sweepstakes with contract where an ambush marketer uses prizes related to such matches, and using event tickets in an unauthorised way.32 MLS and Mexican national soccer team But there is a reluctance to take legal trade marks and colours in promotions. action against ambush marketers, for a MLS and SUM brought claims for trade- number of reasons. Ambush marketers mark infringement, false designation of have increasingly launched more sophisti- origin, false advertising, breach of contract cated campaigns that blur the lines based on the ticket language, fraud and between legal marketing activity and mar- deceptive marketing claims. keting that constitutes trademark infringe- Also in December 2009, NBA great ment or false association. Because Michael Jordan sued two Chicago-area ambushers rarely use the actual trade grocery stores for placing advertisements marks of the property, a pure trademark in a Sports Illustrated commemorative issue infringement claim is often unavailable, celebrating Jordan’s induction into the thus leaving the ambush campaign in a Basketball Hall of Fame where such adver- legal grey area. Additionally, many ambush tisements offered congratulations to Jordan campaigns last only for a short period of and featured his name, his number 23 time, which makes the time and cost of lit- jersey from his playing career and images igation to prevent such a campaign pro- of basketball shoes meant to resemble his hibitive. Further, ambush marketers can branded ‘Air Jordans’.35 Both advertise- take the simple step of including a dis- ments tied the congratulatory message claimer in their marketing campaigns and, into marketing slogans for each grocery while not a foolproof defence, there is store.36 Jordan brought claims for, among some judicial support around the use of other things, violations of his right of pub- disclaimers as a valid defence.33 Because licity under Illinois state law, trademark litigation can bring uncertain results, is infringement, false endorsement and very costly and the ambush marketer may deceptive business practices. welcome the extra publicity that it Although lawsuits targeting ambush receives, properties are hesitant to sue over marketing campaigns are risky, nevertheless ambush marketing. there have been a few circumstances where Recently, however, two high-profile a property successfully sued an ambush properties brought suits against alleged marketer in the USA over the wrongful ambush marketers. First, in December taking of the property’s goodwill. For 2009, Major League Soccer (MLS) and its example, in University of Georgia Athletic

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Association v. Laite,37 the Eleventh Circuit among the fans of the schools’ football Court of Appeals upheld an injunction teams who desired to show support for against a wholesaler of novelty beers, pre- and affiliation with those teams.42 venting the wholesaler from selling cans of Even where a property does not obtain ‘Battlin’ Bulldog Beer’ featuring a logo of a a court decision, simply taking action may cartoon snarling bulldog with a sweater still lead to success. For example, in United emblazoned with the letter ‘G’ that the States Olympic Committee v. Asics America University claimed was too similar to its Corporation,43 the USOC sued Asics for bulldog mascot and logo. Although the running multiple print and internet adver- logos were not exactly the same, the total tisements supporting its endorsed athletes’ context of the use, which included the accomplishments in connection with the University’s official colours, was found to 2008 Olympics. As mentioned previously, be too similar. The court further found that these advertisements included a print the wholesaler intended to capitalise on the advertisement featuring a photograph of goodwill of the university’s football team.38 Asics-endorsed marathoner Ryan Hall Similarly, in National Football League v. that stated: ‘Good luck in the 2008 Coors Brewing Company, the Second Summer Olympic Games. From all your Circuit Court of Appeals upheld the NFL’s fans at Asics’, as well as congratulatory injunction against Coors for its use of the messages on Asics’ website for its endorsers phrase ‘Official Beer of NFL Players’ in making the US Olympic team. Although marketing materials because the court the USOC voluntarily dismissed its com- found that Coors’ intent was to capitalise plaint, the parties apparently settled their on the goodwill of the NFL trade mark.39 differences, as Asics subsequently entered The court determined that Coors’ use of into a multi-year agreement with USA the NFL trade mark went beyond merely Field Hockey, the national governing body descriptive use. for field hockey affiliated with the USOC, Further, in Board of Supervisors for LSU v. to become the ‘Official Partner and Smack Apparel Co.,40 Louisiana State Exclusive Sponsor of footwear, apparel, University and other schools prevailed in a and accessories’.44 trademark infringement action against an All in all, properties should seek to, and apparel maker that sold unauthorised t- often do,45 protect their sponsors, whether shirts with school colours and other iden- such protection is through the purchase of tifying information (such as the advertising space, policing the area around geographic location of the schools or the an event, or through litigation, in order to specific football bowl game, the names of signal to ambush marketers that the prop- specific football bowl games and the erties take their sponsors’ exclusive rights number of victories the particular school seriously. had). The Fifth Circuit Court of Appeals found that the schools’ team colours were protectable as unregistered trade marks, as SPONSORS’ WAYS TO PROTECT the schools were able to show secondary THEIR EXCLUSIVE RIGHTS meaning for their colours.41 The court Although sponsors will rely on properties determined that the defendant’s use of the to protect their exclusive rights from schools’ colours and other indicia was ambush marketers, sponsors should antici- designed to create the illusion of affiliation pate having to police ambush marketing with these schools and essentially obtain a when negotiating an agreement. When ‘free ride’ by profiting from confusion negotiating a sponsorship agreement, the

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sponsor should first determine what rights itself can protect its exclusive rights from the property controls and what rights the ambush campaigns. For example, by sponsor is receiving. A sponsor does not buying up assets outside of the sponsor’s want to finalise an agreement with a team, official rights to supplement the associa- only to find out that the stadium in which tion between the sponsor and the prop- the team plays controls its own marketing erty, or purchasing product or service rights and has offered similar sponsorship category exclusivity from the broadcaster rights to the sponsor’s competitor. The of the event, although both actions are sponsor should also focus on the defined expensive propositions. terms in the agreement to determine how Perhaps most importantly, sponsors ‘exclusive’ and ‘competitor’ are defined. should come up with creative marketing Properties often slice the ‘competitor’ pie campaigns to out-market potential thinly, which allows for more sponsors ambushers. There may be no airtight way (and more sponsorship fees), but could also to obtain complete exclusivity, so sponsors dilute a sponsor’s exclusivity.46 The should leverage their official assets to number of sponsorships offered alone may maintain control of the sponsorship and clutter the marketplace and dilute a spon- maximise the value of their investment. sor’s rights. At the end of the day, a spon- The sponsor could make it easy for the sor should be cognisant of what rights it is public to remember its association with actually buying and what rights other the property, rather than that of an sponsors are receiving. ambushing competitor, as the sponsor has The sponsor should also insert specific the best ability to leverage its association contractual provisions to protect its exclu- with the property as it can capitalise on sive rights under a sponsorship agreement. the assets the property has offered through For example, the sponsor should contrac- the official sponsorship, such as marketing tually obligate the property to include it as rights, rights to the property’s trade marks the (or an) official sponsor in all advertis- and logos, access to tickets and VIP events, ing by the property where sponsors are etc. A sponsor should clearly identify itself listed, and should include a most favoured as the ‘official sponsor of X’ and go out of nations clause so that it receives as many its way to incorporate the property’s offi- rights as other sponsors at the same or cial trade marks and logos so that con- similar sponsorship level. In order to pre- sumers recognise the sponsor as being vent the devaluation of its exclusive rights, officially affiliated with the property.47 a sponsor should seek a right of first refusal With strong marketing activation and cre- for exclusivity in other categories from ativity, consumers should remember the that initially agreed with the sponsor, and sponsor’s campaign and not that of an should seek language granting a fee reduc- ambush marketer. tion if the property enters into an arrange- ment with another sponsor that diminishes the sponsor’s rights. Further, CONCLUSION the sponsor should contractually require In a tighter spending environment, and the property to protect the sponsor’s during the year of two of the world’s exclusive sponsorship by policing all largest sporting events,48 marketers are advertising related to the event and looking for creative ways in which to asso- actively pursuing any ambush marketer. ciate themselves with high-profile proper- In addition to having the property pro- ties, whether authorised or not. To protect tect against ambush marketing, the sponsor the value of the sponsorship and to set the

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stage for future sponsors, properties must increasingly cluttered sponsorship protect an official sponsor’s exclusive environment resulting from the various rights by preventing or stopping ambush Olympic properties’ aggressive, revenue-driven slicing of sponsorship marketing. At the same time, official spon- categories and levels. See: Seguin, B. and sors should leverage the rights received in O’Reilly, N. J. (2008) ‘The Olympic an official sponsorship to make their mar- brand, ambush marketing and clutter’, keting stand out. If both parties act in International Journal of Sport Management concert, they can maximise the value of and Marketing, Vol. 4, Nos. 1–2, the official sponsorship. pp. 62–84. (3) Farrelly, F., Quester, P. and Greyser, S. A. ᭧ Christopher R. Chase and Rick (2005) ‘Defending the co-branding Kurnit, 2010 benefits of sponsorship B2B partnerships: The case of ambush marketing’, Journal of Advertising Research, REFERENCES September, pp. 339–348. (1) For example, the banking industry spent (4) Seguin and O’Reilly, ref. 2 above, p. 66: US$900m on sports sponsorship rights ‘Rights holders of valuable sport fees in 2008, and an additional properties are concerned as ambush US$122m on sports advertising that marketing diminishes the value of their same year; see Lefton, T. and Mickle, T. properties.’ In this day and age, however, (2009) ‘Beaten-up banks’, Sports Business it is hard for any property to sell Journal, Vol. 11, No. 44, p. 1. Home complete exclusivity, not only due to the Depot spent between US$60–65m on complex layering of sports related assets sports sponsorships in 2007; see Tobin (such as league, teams and players’ rights) Ramos , R. (2008) ‘Home Depot weighs but because a property cannot claim to its Olympic role’, The Atlanta own the generic value associated with a Journal-Constitution, 11th May Section C, sport — ‘as a result, there will always be p. Anheuser-Busch spends US$300m opportunity for some degree of ambush annually on sports sponsorships around to occur’. See: Farrelly et al., ref. 3 the world; see Sports Business Daily above, p. 342. (2008) 15th July ‘InBev’s $52B takeover (5) ‘To provide value for their sponsor, of A-B could impact sports properties must be at the front line, sponsorships’, available at: http://www. fending off ambushers by all possible sportsbusinessdaily.com/article/12235 means at their disposal, be it law (accessed 1st October, 2009). see also enforcement, provision of exclusive and Sports Business Daily (2007) 19th naming rights, or even by their September, ‘Marketplace round-up’, deliberate exclusion of sponsors’ available at: http://www.sportsbusiness competitors at any level of the daily.com/article/115056 (accessed 1st sponsorship to avoid possible confusion.’ october, 2009). See: Farrelly et al., ref. 3 above, p. 344. (2) Another issue, which will not be (6) Norris, D. (2010) ‘At least Dick Turpin explored in detail in this paper, is wore a mask . . . the threat of ambush sponsorship clutter — essentially marketing’, FC Business, No. 41, January, properties ambushing their own sponsors p. 40; Sauer, A. (2002) ‘Ambush by over-selling sponsorships. For marketing steals the show’, Brand example, research by Seguin and Channel, 27th May, available at: O’Reilly suggests that executives from http://www.brandchannel.com/features companies with Olympic Partner status _effect.asp?pf_id=98 (accessed 29th are less concerned about ambush October, 2009). marketing than they are about the (7) This is a very popular type of ambush

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marketing. In May 2010, New Balance, have an obligation to protect Panasonic’. at the expense of official sponsor Adidas, See: Mickle, T. (2008) ‘USOC, Panasonic planned to cover the city of Boston with upset with Vizio ad airing during NBC’s multiple forms of advertising before and coverage’, Sports Business Journal, Vol. 11, during the Boston Marathon, claiming No. 7. that this would be its biggest promotion (13) Mickle, T. (2010) ‘Revival of Olympic ever. The company was plastering bus ambush marketing shows power of shelters, taking over a transit stop, Games’, Sports Business Journal, Vol. 12, wrapping trolley cars, and handing out No. 39. grab bags and spectator guides mapping (14) Like any potentially conflicting out the marathon course. Although New sponsorship deal with a national Balance is taking steps to prevent governing body, which does not extend infringement by not actually referring to to the Olympic games according to the the event, according to a New Balance USOC, the deal of Verizon Wireless with spokesperson: ‘If people walk away [from the US speed skating team poses a the Boston Marathon] thinking New challenge to the USOC, because the Balance, and not Adidas, then we’ve national governing bodies are done our job’. See: Abelson, J. (2010) autonomous and therefore can seek ‘Picking up its pace’, Boston Globe, 2nd non-USOC sponsors to help fund their April, p. 7. operations. See: Mickle, ref. 13 above. (8) Sauer, ref. 6 above. (15) Mickle, T. (2010) ‘USOC scolds (9) Fans who purchased 12 cans of Bavaria companies for alleged ambush marketing beer could buy the trousers for just efforts’, Sports Business Daily, 27th c7.95. See: Harding, L. and Cuff, A. January, available at: http://www.sports (2006) ‘The new World Cup rule: Take businessdaily.com/article/136544 off your trousers, they’re offending our (accessed 30th January, 2010). sponsor’, The Guardian, 19th June. (16) Hechinger, J. (2009) ‘Team-color Bud (10) FIFA now bans ‘commercially-branded cans leave colleges flat’, The Wall Street clothing or accessories which are Journal, 21st August, Section A, p.1. mass-distributed prior to the matches by (17) Some schools, such as the University of commercial entities clearly targeting Michigan, Oklahoma State University FIFA World Cup fans’. See Harding and and Boston College, threatened legal Cuff, ref. 9 above; Mullman, J. (2010) action or otherwise told ‘World Cup kicks off marketing games Anheuser-Busch to stop distribution of on epic scale’, Advertising Age, Vol. 81, the cans near their campuses, while No. 20, p. 4. others, such as Louisiana State University (11) During the 2007 US Open, the US and the University of Texas, did not. For Tennis Association prohibited Arizona the schools that complained, each cited Iced Tea from distributing free samples trademark issues and concerns about of its isotonic beverage on the event alcohol abuse. When a school grounds, as this beverage conflicted with complained, Anheuser-Busch the official isotonic beverage of the US discontinued distribution in the area of Open — Gatorade. See Kaplan, D. that school. Further, aside from potential (2007) ‘USTA blocks marketers looking trademark issues, an attorney for the to ambush Open’, Sports Business Journal, Federal Trade Commission criticised the Vol. 10, No. 20, p. 6. campaign, finding that it could (12) Panasonic, the International Olympic encourage underage and binge drinking Committee and the US Olympic on college campuses. See Hechinger, ref. Committee (USOC) spoke to NBC 16 above; Hechinger, J. (2009) ‘FTC about the advertisement. According to criticizes college-themed cans in the USOC’s chief marketing officer: ‘we Anheuser-Busch marketing efforts’, The

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Wall Street Journal, 25th August, Section consumers would not be confused as to B, p.1. the company’s sponsorship status.) Also (18) According to an Anheuser-Busch note the recent lawsuits brought by spokesperson, the school colours Michael Jordan against two Chicago-area campaign aimed to use ‘color schemes to grocery stores discussed below. See: connect with fans of legal drinking age Jordan v. Jewel Food Stores, Inc., in fun ways in select markets across a 2009-L-015549, Complaint (Ill. Cir. variety of sports’. See: Hechinger, ref. 16 Court 21st December, 2009), removed above. to the US District Court for the (19) Time (1992) ‘Who’s the loser’, Time, Northern District of Illinois, No. 27th July. According to an IOC 10-CV-00340 (N.D. Ill. 19th January, executive board member: ‘this is the fifth 2010); and Jordan and Jump 23, Inc. v. successive Olympic Games in which Dominick's Finer Foods, LLC, No. American Express has falsely implied 2009-L-015548, Complaint (Ill. Cir. such [an official] connection’. See: Los Court 21st December, 2009), removed Angeles Times (1994) ‘Credit card war to the US District Court for the erupts at Olympics’, Los Angeles Times, Northern District of Illinois, No. 19th February, Business section, p. 1. 10-CV-00407 (N.D. Ill. 20th January, (20) Within the USA, for example, terms 2010). such as ‘VANCOUVER 2010’ and (23) Manasso, J. (2009) ‘AirTran gaining ‘LONDON 2012’ are registered trade yardage from Falcons players’, Atlanta marks of the USOC. Business Chronicle, 2nd January. At that (21) The billboards also feature famous time, AirTran’s marketing materials locations in Boston, such as the Back featured the players in generic colours Bay and the Charles River with the and clothing, because the company did Prudential Tower in the background. not have rights to the National Football See: Abelson, ref. 7 above. League’s (NFL’s) official trade marks and (22) Asics ran multiple print and internet logos. In late 2009, however, AirTran advertisements supporting its endorsed became the official sponsor of the athletes’ accomplishments in connection Falcons and was able to use the team’s with the 2008 Olympics. For example, a official trade marks and logos. See: print advertisement featuring a Yamanouchi, K. (2009) ‘AirTran’s photograph of Asics-endorsed Falcon’s sponsorship takes off’, The marathoner Ryan Hall stated: ‘Good Atlanta Journal-Constitution, 13th luck in the 2008 Summer Olympic October, News section, p. A9. Games. From all your fans at Asics’. See: (24) The Athens Olympic Organising United States Olympic Committee v. Asics Committee reportedly spent c750,000 America Corporation, No. 08-CV-00522, to clear 10,000 billboards from buildings Complaint (C.D. Cal. 9th May, 2008). In and rooftops around Athens ‘in an effort another example, Fuller’s London Pride to stop the habitual ambush marketing Ale ran print advertisements during the that usually surrounds’ the Olympic 2009 Six Nations rugby tournament games. With a similar goal in mind, the featuring a rugby goal post with the text US Tennis Association went as far as ‘Support English Rugby’ beneath the booking the New York region’s only image. See Advertising Standards Agency skywriting service during the two weeks (2009) ‘ASA Adjudications’, 1st July. surrounding the US Open, in part to (Notably, the UK’s Advertising Standards keep non-official marketers from Agency, in response to a complaint filed advertising in the airspace over the event by England’s Rugby Football Union, location. See: Gibson, O. (2004) found that, although Fuller’s was not a ‘Olympic battles against “ambush sponsor of the Rugby Football Union, marketing”’, The Guardian, 22nd July;

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Kaplan, ref. 11 above. (30) It should be noted, however, that the (25) Burton, N. and Chadwick, S. (2009) ‘A USOC does not need to prove a Typology of Ambush Marketing: The likelihood of confusion, which is the Methods and Strategies of Ambushing in hallmark under the Lanham (Trademark Sport ’, CIBS Working Paper No. 10, Act), for uses of certain Olympic trade available at: http://www.coventry.ac.uk/ marks, because of the ‘super’ trademark researchnet/external/content/1/c4/53/ rights given to it under the Ted Stevens 26/v1245765660/user/CIBS_WP10.pdf Olympic and Amateur Sports Act. See (accessed 1st October, 3009). 36 U.S.C. §§ 220501 et seq. Rather, the (26) For example, the Vancouver Olympic USOC just needs to prove that a Organizing Committee (VANOC) defendant used those specific Olympic worked with Vancouver City Council to marks for a commercial purpose without pass local ordinances to restrict its authorisation. unauthorised commercial advertising on (31) See, eg The State of Georgia’s Uniform city streets surrounding the time of the Deceptive Trade Practices Act, O.C.G.A. 2010 Olympics. According to its § 10-1-370 et seq. spokeswoman: ‘VANOC’s efforts are (32) See, eg NCAA v. Coors Brewing Co., focused on reducing ambush marketing 02-CV-01325, Complaint (S.D. Ind. and protecting the $1B investment that 26th August, 2002). Here, the NCAA sponsors have made towards the success sued Coors Brewing Co. after Coors and legacy of the Games’. See: Lee, J. allegedly gave away tickets to the NCAA (2009) ‘Council passes watered-down men’s basketball championships as a Olympics bylaws package’, Vancouver promotional prize in the Coors Light Sun, 24th July. Additionally, during the ‘Tourney Time Sweepstakes’. NCAA 2008 NCAA ‘Final Four’ men’s tickets expressly prohibit this practice, basketball championships, San Antonio which is stated on the ticket-back. The designated several blocks near the event parties settled the case without an location as a clean zone (‘NCAA admission of wrongdoing by Coors. sponsors pay heavily for the right to More recently, the NFL’s Philadelphia have their names associated with the Eagles brought a breach of contract spectacle, and they don’t want other claim, among others, against a radio advertisers to dilute the marketing station offering tickets to Eagles games opportunity’). See: Pack, W. (2008) ‘A through contests and other promotional zone defense’, San Antonio Express-News, giveaways in breach of the ticket-back 26th March, Business section, p. 1. language. See: Philadelphia Eagles, LLC v. Further, the NBA required the city of Equity Communications LP, Arlington, Texas to pass an ‘anti-ambush’ 09-CV-04968, Complaint (D. N. J. 25th marketing ordinance in advance of the September, 2009). The lawsuit was 2010 NBA All-Star Game, which would settled shortly after the complaint was temporarily restrict advertising near the filed on very favourable terms for the location of the game. See: Schrock, S. Eagles, including an injunction (2009) ‘Arlington to consider advertising prohibiting the radio station from using rules to protect NBA All-Star game from Eagles and NFL trade marks for rivals’, Star-Telegram, 29th November. promotional purposes and from (27) Gardner, E. (2007) ‘Protecting the Super representing that the station’s Bowl trademark remains a battle’, The promotions were affiliated with the Hollywood Reporter, 2nd February. In NFL. See: Philadelphia Eagles, LLC v. addition, the authors have such a Equity Communications LP, Final Order ‘reminder’ letter on file. and Judgment on Consent (1st (28) 15 U.S.C. § 1114. December, 2009). The station also had (29) 15 U.S.C. § 1125. to return all NFL tickets that it intended

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to give away and pay US$10,000 NFL trade mark. towards the Eagles’ attorneys’ fees. (40) 550 F.3d 465 (5th Cir. 2008). (33) National Football League v. Delaware, 435 (41) Such factors of secondary meaning for F. Supp. 1372, 1381 (D. Del. 1977). the school colours included use of them (34) Soccer United Marketing, LLC and Major for over 100 years, a large amount of League Soccer, LLC v. The Black & Decker licensing income from goods featuring Corp., 09-CV-10378, Complaint them and nationwide exposure of them. (S.D.N.Y. 22nd December, 2009), Ibid. at 476. Second Amended Complaint (S.D.N.Y. (42) Ibid. at 483–484. 3rd March, 2010). According to the (43) No. CV-08-00522 Complaint (C.D. Cal. complaint, ‘the confusion created by 9th May, 2008). B&D's promotions is directly impacting (44) USA Field Hockey (2009) Press release, SUM's relationship with Makita, which 24th March, available at: is the exclusive power tool sponsor of http://www.usfieldhockey.com/news/ MLS and FMF since 2005’. Ibid. at ¶ 37. article.php?newsID=128 (accessed 1 (35) Jordan v. Jewel Food Stores, Inc., October 2009). The agreement is ‘the 2009-L-015549, Complaint (Ill. Cir. largest corporate partnership in USA Court 21st December, 2009), removed Field Hockey's history’. to the US District Court for the (45) The NFL has intervened on its official Northern District of Illinois, No. sponsors’ behalf on many occasions. For 10-CV-00340 (N.D. Ill. 19th January, example, when electrolyte strip maker 2010); and Jordan and Jump 23, Inc. v. Enlyten attempted to sign a sponsorship Dominick's Finer Foods, LLC, No. deal with an individual team, the NFL 2009-L-015548, Complaint (Ill. Cir. sent a letter to the team, and all other Court 21st December, 2009), removed teams in the league, forbidding them to the US District Court for the from accepting Enlyten as a sponsor, due Northern District of Illinois, No. to the conflict with the official 10-CV-00407 (N.D. Ill. 20th January, electrolyte provider Gatorade (the letter 2010). stated that ‘Gatorade is one of our most (36) The Dominick's advertisement used the important corporate sponsors, and have phrase ‘You're a cut above’ and featured a the rights to [Enlyten’s] business coupon for steak, while the Jewel-Osco category’). See: Williams, F. O. (2007) advertisement stated: ‘Jewel-Osco salutes ‘Enlyten goes on offensive against #23 on his many accomplishments as we Gatorade, PepsiCo’, The Buffalo News, honor a fellow Chicagoan who was “just 31st October, p. B7. The NFL also fined around the corner” for so many years’. star linebacker Brian Urlacher The ‘just around the corner’ phrase US$100,000 for wearing a cap during being a Jewel-Osco marketing slogan. Super Bowl media day that promoted an (37) 756 F.2d 1535 (11th Cir. 1985). unauthorised sponsor — the (38) Interestingly, the defendant used a Urlacher-endorsed Vitaminwater. Again, disclaimer to obviate any confusion the NFL was protecting the rights of its between the parties’ logos, but the court official sponsor Gatorade. See: Associated found that the disclaimer on the can was Press (2007) ‘NFL fines Urlacher $100K too inconspicuous to prevent consumer for Super Bowl hat’, 20th April. confusion. NASCAR also goes to great lengths to (39) 205 F.3d 1324 (2d Cir. 1999). Coors protect its official sponsors. For example, entered into an agreement with the NASCAR took a lawsuit brought by a NFL Players Association (the professional team sponsor up to the Eleventh Circuit football players' union) in order to call Court of Appeals in order to protect its itself the ‘Official Beer of NFL Players’, title sponsor Sprint Nextel (reversing the which here the NFL argued infringed its district court’s decision that allowed

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AT&T Mobility to switch the branding Olympic-themed ‘alternate reality game’ on its team car sponsorship, which called ‘The Lost Ring’ as part of its build NASCAR contended violated the up to the 2008 Summer Olympics, exclusivity of sponsor Sprint Nextel). which initially featured no sponsor or See: AT&T Mobility LLC v. Nat’l official Olympic branding. See: Clifford, Association for Stock Car Auto Racing, Inc., S. (2008) ‘An online game so mysterious 494 F.3d 1356 (11th Cir. 2007). its famous sponsor is hidden’, The New (46) For example, one sponsor may have York Times, 1st April, Section C, p. 5. exclusive rights for bottled water (48) Notably, a recent Advertising Age article products, while another has exclusive described the World Cup as being the rights for soft drinks. The two sponsors undisputed pinnacle of ambush could be overall competitors in the marketing. According to FIFA, the 2006 beverage business, therefore the World Cup in Germany featured 3,300 exclusivity may be diluted. ‘rights violations’ in 84 countries. See: (47) Unless, of course, the sponsor wants to Mullman, J. (2010) ‘World Cup kicks off activate its sponsorship stealthfully. For marketing games on epic scale’, example, McDonald’s launched an Advertising Age, 17th May.

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