Ambush Activism Trends in Ambush Marketing

What you need to know

• The flurry of major global sporting events in the wake of COVID-19 pandemic has presented those looking to engage in ambush marketing with fresh opportunities.
• More recently, not only has the 2022 FIFA World Cup in Qatar attracted significant investment from sponsors seeking to market their products and services and increase brand awareness but the event has also presented a platform for opportunistic brands looking to leverage criticisms of the World Cup to build their own profile and goodwill.
• Ambush marketing is problematic for both sponsors and event organisers as it can reduce the value of the sponsorship investment and diminish the appeal of official sponsorships.
• Sponsors and event organisers must collaborate and take action before and during major events to mitigate the risk of ambush marketing.

What you need to do

• Event organisers should be cognisant of the risks posed by ambush marketing to the value of the rights to be offered for sale to sponsors, and implement measures to minimise these risks.
• Sponsors should ensure that agreements they enter into with event organisers include clear exclusivity provisions, and have action plans in place to respond to any ambush marketing attempts.

What is ambush marketing?

Major events, such as the World Cup in Qatar, attract significant worldwide attention and provide crucial marketing opportunities for advertisers.  It also presents a prime target for opportunistic businesses seeking to leverage the profile of the event to promote their brands through ambush marketing tactics.

Traditionally, ambush marketing is a strategy used by advertisers to suggest that they have an affiliation with an event or to share in the publicity surrounding an event, without having any official authorisation.  Usually, ambush advertisers seek to benefit from the goodwill associated with an event by promoting a connection between themselves and the event, without paying for any such rights.  Ambush marketing is problematic for sponsors because it has the potential to dilute the value of investments made by legitimate sponsorship.  Where the official sponsors' rights can be easily encroached upon by ambush marketers, the appeal of an official sponsorship will be tarnished and may lead to difficulties in procuring future sponsorships.  This in turn affects event organisers who rely on sponsorship fees to cover and recoup the costs of putting on the event.

There are generally three types of ambush marketing strategies:

• Direct or predatory: where the advertiser makes a false claim that they are affiliated with the event.
• Indirect: where the advertiser does not directly reference the event, but hints at the event by alluding to similar concepts or images.
• Distractive: where the advertiser diverts attention from the event and the official sponsors, for example by adopting a marketing campaign which criticises the event while promoting the brand's values, as a way to benefit from "badwill" associated with the event.

Increasingly we have seen the deployment of the distractive strategy in which brands are using negative publicity and criticisms of events like the World Cup in Qatar to raise their brand's public profile and increase their profitability.

Some of the recent trends, and the wide variety of ambush marketing strategies being deployed, are best illustrated by recent interesting examples.

Case studies

BrewDog – Anti-Sponsor of the World F*Cup

BrewDog is a Scottish brewery and pub chain.  In November 2022, BrewDog launched its 'anti-sponsorship' campaign protesting Qatar's human rights record through social media and billboards. It promised to donate all profits from the sale of "Lost Lager" sold during the World Cup to human rights charities.  Some of the slogans promoted by the campaign included:

• “Proud Anti-Sponsor of the World F*Cup”
• “Eat, Sleep, Bribe Football.”
• "The Beautiful Shame"
• “First Russia, then Qatar. Can’t Wait for North Korea.”

As you may have guessed, BrewDog does not have an official partnership with the World Cup. Their campaign is unique in that it seeks to benefit off the "badwill" associated with the Qatar World Cup and recent public criticisms of the event in order to promote its brand, products and build goodwill.

To avoid legal action for trade mark infringement, BrewDog refrained from referring to 'FIFA' which is protected as a registered trade mark.  Further, given the critical nature of the campaign, no reasonable member of the public would be misled to believe that BrewDog is an official sponsor of the World Cup which FIFA would need to demonstrate to establish a cause of action, if the conduct were to take place in Australia.  This example shows how opportunistic and well-prepared brands can use ambush marketing to benefit from public interest (positive or negative) in events, seemingly without contravening the law and misleading consumers.

Duolingo – sponsorship of 'the other Qatar'

In November 2022, the language learning app Duolingo announced that it was the official sponsor of "the other Qatar", an amateur soccer team based in Rio de Janeiro, Brazil.  Under the sponsorship, the Qatar FC players were provided with jerseys featuring the Duolingo logo and "Duo" the owl became the team's official mascot.  Duolingo also released a press release which announced the sponsorship while deliberately redacting all references to the 2022 FIFA World Cup in Qatar.  The second part of this campaign included the launch of the "Fowl Word Generator" ahead of the World Cup, which allowed soccer fans to generate cheers or insults in other languages.

It's an example of indirect and distractive ambush marketing to leverage off the attention of a major event, without explicitly referring to it or representing that the brand is an official sponsor.

Australian Olympic Committee Inc v Telstra Corporation Ltd (2017) 258 FCR 104

The dispute between the Australian Olympic Committee (AOC) and Telstra in relation to the 2016 Olympic Games is not as recent as the other examples, but illustrates a key issue for sponsorships in the context of marquee sporting events.  There is invariably multiple layers of potential sponsorships at the international and local level for such events, including: of the event itself, of official teams participating in it, of individual athletes, and of the local broadcast (which also usually provides access to a large volume of advertising spots in and around the broadcast).  If a sponsor does not take up all available sponsorships in its brand category, it leaves open the risk that a competitor may do so and in doing so, will dilute the sponsor's rights.  This was precisely the issue in this case.  In late 2015, Optus replaced Telstra as the official sponsor of the AOC.  However, Telstra retained its sponsorship of Seven's broadcast of the Olympic Games, a sponsorship it had held for many previous Olympic Games and which entitled Telstra to recognition as the official broadcasting partner of Seven for the 2016 Rio Olympics as well as significant advertising spots in and around the broadcast.

Unsurprisingly, Telstra launched a marketing campaign in the lead-up to the 2016 Olympic Games in Rio de Janeiro which showed people watching the Olympics with Peter Allen's song "I Go To Rio" playing in the background of television advertisements and which referred to Telstra's sponsorship of the broadcast.

Telstra's campaigns referred to eligible Telstra customers being given premium access to Seven's "Olympics on 7" app.

The AOC commenced proceedings in the Federal Court alleging that Telstra breached the Olympic Insignia Protection Act 1987 (Cth) and contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct.

The Court found that Telstra did not use the word 'Olympics' except in composite phrases with 'Seven'.  Further, images of the Olympic symbol, flag or emblem, images of Olympic athletes, or images of the Australian Olympic team were not depicted in the advertisements.  The Court noted that Telstra was a sponsor of the Seven broadcast and held that its actions were consistent with its status as the official broadcast partner.  Consequently, in dismissing the appeal, the Full Court found that Telstra's conduct did not suggest to a reasonable person that it had a sponsorship of the Olympic Games themselves or of the AOC, but rather that Telstra was a sponsor of Network Seven's broadcast of the Olympic Games.

Puma Tokyo 2021

In March 2020, the International Olympic Committee and the Tokyo 2020 Organising Committee announced the postponement of the Tokyo 2020 Olympics to 2021 due to the COVID-19 pandemic.  However, the event would still be called the "Tokyo 2020" Olympics.

On the same day, Puma filed an application with the United States Patent and Trademark Office (USPTO) to register "PUMA TOKYO 2021" as a trade mark.  Later, Puma also filed applications to register "PUMA BEIJING 2022" and "PUMA PARIS 2024" as trade marks.  These applications were rejected by the USPTO due to the likelihood of confusion with the U.S. Olympic and Paralympic Committee's (USOPC) trade marks, including "TOKYO 2020", "BEIJING 2022" and "PARIS 2024".

Subsequently, Puma filed cancellation proceedings with the Trademark Trial and Appeal Board, challenging the USOPC's trade marks.  This was a very surprising move on Puma's part given that the USOPC has historically received strong statutory and judicial support for the protection of its intellectual property rights.  The USOPC responded by initiating proceedings against Puma alleging, amongst other things, trade mark infringement and violations of US legislation which regulate the commercial use of certain Olympic expressions.  Both parties' proceedings were voluntarily dropped.

This example shows how some brand owners can seek out the limelight by taking offensive legal action against the intellectual property rights of event organisers.  It illustrates how important it is for sponsors to be well-prepared to defend their intellectual property rights.

What can event organisers and official sponsors do to minimise the risk of ambush marketing?

From a legal perspective, the key areas of potential assistance are the ACL, the tort of passing off and if available, the relevant specific anti-ambush marketing legislation.

Section 18 of the ACL creates a broad prohibition on misleading or deceptive conduct.  It states that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive.  If an ambush marketing campaign, viewed objectively, has a real or not remote chance or possibility of misleading or deceiving an ordinary, reasonable member of the public as to the advertiser's association with the major event, then it will be in breach of section 18 of the ACL.

Section 29(1)(h) of the ACL creates a further prohibition on making false or misleading representations that a person has a sponsorship and approval of affiliation that they do not have.

A range of remedies are available under the ACL for contraventions of sections 18 and 29, including:

• the grant of an injunction to restrain the advertiser from continuing to engage in misleading or deceptive conduct;
• the making of an adverse publicity order which requires the advertiser to make disclosures in an advertisement; or
• awarding damages for loss suffered as a result of the conduct.

Ambush marketing may also constitute passing off where:

• the plaintiff has a reputation or goodwill in its get-up, including any brand name;
• the defendant engages in deceptive conduct by using the same or a deceptively similar get-up; and
• the plaintiff suffers or is likely to suffer damage as a result of the defendant's conduct. 

However, sections 18 and 29 of the ACL and passing off will only be of assistance in some contexts.  Ambush marketing campaigns often make it clear that the advertiser does not have an official sponsorship, such as in the BrewDog and Duolingo examples discussed above.  In these scenarios, it would be difficult to say that an ordinary, reasonable member of the public would be misled as to the advertiser's association (or disassociation) with the event.  It may be even more difficult for a sponsor to establish the tort of passing off, as damage suffered may not be easily quantifiable.

Major events legislation may be enacted to prohibit the unauthorised use of indicia and images associated with specific events and to provide remedies for such unauthorised use.

For example, the Major Sporting Events (Indicia and Images) Protection Act 2014 (Cth) (MSEP Act) provides special protection in relation to major sporting events specified in its Schedules.  Currently, the ICC Men’s T20 World Cup 2022 and the FIFA Women's World Cup Australia New Zealand 2023 are the major sporting events specified.  The MSEP Act provides that only authorised persons (in accordance with the relevant authorisation) and event bodies may use any of the relevant event's protected indicia and images for commercial purposes during the protection period.

Another example of major events legislation is the Olympic Insignia Protection Act 1987 (Cth) (OIP Act).  The OIP Act makes provision for the protection of the Olympic insignia by designating the Australian Olympic Committee (AOC) as the owner of copyright in the Olympic symbol and the owner of certain Olympic designs.  The OIP Act also prohibits persons other than the AOC or licensed users, from using specified protected Olympic expressions, being "Olympic", "Olympics", "Olympic Games", "Olympiad", "Olympiads", for commercial purposes.  The OIP Act provides a suite of remedies for the prohibited use of protected Olympic expressions, including injunctions, corrective advertisements, damages, account of profits and the destruction or delivery of goods.

Of course, many ambush marketing campaigns are carefully crafted so that they do not amount to a contravention of applicable law.  For example, they may not actually use any of the official indicia associated with the event, or it may be clear from the nature or content of the campaign that the business is not an official sponsor.  Further, even where the conduct does contravene an applicable law, enforcement action can backfire if perceived by the public as being too heavy-handed or if it amplifies the ambush marketers message.

Event organisers and sponsors accordingly need to adopt other strategies to seek to mitigate the impact of ambush marketers.

Event organisers

An event organiser's ability to maximise the commercial return of the sponsorship opportunities they offer depends on its ability to offer value to its sponsors.

Potential strategies for event organisers include:

• ensuring all available intellectual property is protected to the fullest extent possible: planning in advance by registering all relevant event insignia, including word and logo trade marks, domain names and social media accounts that will be associated with the event and pro-actively monitoring for infringement (for major international events, lobbying for event-specific legislation to protect official insignia);
• blackout periods:  sponsorship of professional sport is inevitable particularly for athletes who secure the majority of their earnings from sponsorships.  That said, event organisers can consider the extent to which a "blackout" period in the lead-up to an event can assist in protecting the rights of official sponsors from individual athlete sponsors that are unaffiliated with the event.  A well-known example of the enforcement of blackout periods is Rule 40 of the Olympic Charter, which establishes a blackout period of 9 days before the opening ceremony to 3 days after the closing ceremony.  This rule is somewhat controversial because it can have the effect of preventing athletes and teams from securing important revenue.
• exclusion zones: implementing exclusion zones around the event location is an effective method to prevent official sponsors' competitors from advertising within close proximity to the event.  For example, the FIFA World Cup Qatar 2022 Ticket Terms of Use provides that ticket holders are prohibited from participating in ambush marketing in or around the stadium.  Broader exclusion zones are usually enabled by legislation that may allow event organisers to define and implement exclusion zones around the event location to prevent ambush marketing.
• plan in advance: have your ambush marketing plan well-formed.  Have a strategy worked out, including relevant correspondence ready to go against ambush marketers.  Have staff briefed, ensuring staff are aware of what conduct they need to report and what they need to do.
• don't leave the door open for ambush marketing: include prohibitions in ticket terms of use which apply to each ticket holder.  This includes prohibitions against: the use of tickets as prizes in competitions organised by non-sponsors; the live dissemination of audio, still or moving images, statistics or data; ambush marketing; and the use of the event organiser's commercial and intellectual property rights without prior written approval.
• is enforcement the best strategy? There is a real temptation to take enforcement action against ambush marketers, but of course, sometimes that is precisely what the ambush marketer relies on for creating the maximum impact.  Carefully consider whether such action will simply inflame the situation and whether the most effective strategy is a no-action one.

Official Sponsors

Some strategies for sponsors to consider include:

• contractual protections: increasing contractual protections to seek to ensure that:
  • the exclusivity and scope of the rights received by the sponsor under sponsorship agreements are clear, sufficiently detailed and do not overlap with other sponsors;
  • the event organiser must actively monitor and take all reasonable steps to seek to minimise ambush marketing, including, if possible, take or assist in any enforcement action and clear protections on the sort of conduct the event sponsor will prohibit (eg, the unauthorised display of marketing materials at the event venue, that supply agreements have clear terms prohibiting the supplier from advertising an association or sponsorship where there is a mere supplier relationship etc);

• do not leave valuable sponsorship opportunities available for competitors: if you are going to invest in a sponsorship, ensure the business takes up all available opportunities and has sufficient marketing spend to fully support the sponsorship with advertising and marketing, thereby leaving little scope for opportunistic competitors to secure some related official sponsorship;
• having ambush marketing response plans and checklists in place, as well as clear lines of communication with the event organiser to monitor for, identify and address ambush marketing; and
• ensuring that in-house counsel or external counsel are prepared to advise on any acts of ambush marketing, and are ready to issue cease and desist letters or seek injunctions in order to stop any ambush marketing.

Authors: Anita Cade, Partner; Maria Sun, Counsel; Lachlan Wright, Senior Associate; and Karen Wang, Graduate.