A story of blimps and telephones: governments take a stand on “ambush marketing”

Despite its combative connotations, ‘ambush marketing’ does not refer to aggressive telemarketers, or the volume of TV advertising these days.  Rather, classic ambush marketing occurs when a company attempts to intrude on an existing arrangement between a sponsor and an event, to get the benefits of being associated with the event, without needing to pay the sponsorship fee.  The techniques for doing this can be quite subtle, designed to allude to the event without referring to it by name.

Developments in New Zealand

An oft-cited example of ambush marketing is found in New Zealand Olympic and Commonwealth Games Association Inc v Telecom New Zealand Ltd (1996) 35 IPR 55.  In this case, the Association had entered into an exclusive sponsorship arrangement with a New Zealand telecommunications company, Bell South, for the 1996 Atlanta Olympics.  Telecom NZ, a competitor of Bell South, decided it wanted to capitalise on the popularity of the Olympics, and worked with ad agency Saatchi and Saatchi to develop print advertising, cleverly emblazoned with the words:

RING  RING  RING

RING  RING 

The Association sought an injunction restraining Telecom NZ from using the advertising, relying on trade mark forgery, misrepresentation and passing off.  Their claim was rejected, as it was unlikely consumers would believe Telecom NZ were associated with or a sponsor of the Olympics.  Thus Telecom NZ was able to continue benefiting from the goodwill associated with the Olympic Games.

Cases such as this have motivated governments to take action to prevent ambush marketing of major events.  Dr Owen Morgan, of the University of Auckland, and Emily Hudson, of the University of Melbourne, spoke on this subject at an IPRIA seminar held earlier this week.  Dr Morgan spoke about the Major Events Management Act 2007 (NZ) (MEMA).  The MEMA is designed to protect organisers of major events from ambush by third parties, which can devalue sponsorship opportunities associated with the event.  In particular, it prevents a person from making a representation which suggests to a reasonable person that there is an association between a major event and that person’s goods, services or brands.  Significantly, ‘major events‘ are anything designated as such by an executive order, and are not limited to sporting events.

However, the MEMA goes further than just prohibiting these representations.  It allows for the designation of ‘clean zones’ associated with major events, within which it is an offence for a person to give away or sell goods or sevices without authorisation from the event organiser.  It is also an offence to display advertising within the clean zone or where it is visible from the clean zone, without authorisation. According to the examples given in the legislation, a hypothetical private citizen who sells hot dogs over his fence into the clean zone, would commit an offence and be liable to a fine of up to NZ$150,000.  Dr Morgan describes these prohibitions as ‘heavy handed’.

Australian ambush marketing legislation

Australia is also home to legislation targeting ambush marketing.  On the same day as the IPRIA seminar, the Major Sporting Events Act 2009 (Vic) (Victorian Act) commenced.  The Victorian Act addresses similar concerns to MEMA, as the second reading speech explains.  For designated sporting events, the Victorian Act prohibits a person from engaging in conduct which suggests that particular goods or services have a sponsorship, approval or affiliation with an event or its organiser, when that is not the case.  The maximum penalty is approximately $68,000 (for a corporation).  Similarly, if an event logo has been prescribed, neither it nor a deceptively similar version of it can be used by unauthorised persons for commercial or advertising purposes.  The Victorian Act also prohibits aerial advertising (such as the Holden blimp) at particular events, although this aspect of the legislation is not new.

Unlike New Zealand’s MEMA, the Victorian Act only applies to sporting events, which may only be prescribed if certain criteria are satisfied, and does not prohibit unauthorised trading.  Certain unauthorised advertising is prohibited, but in more limited circumstances to the MEMA.  Although not as restrictive as the New Zealand Act, Victoria’s legislation will limit advertising activity in unprecedented ways.

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