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«Sponsorship Program Protection Strategies for Special Sport Events: Are Event Organizers Outmaneuvering Ambush Marketers? Steve McKelvey University ...»

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Many advertising practitioners have criticized previous versions of the bill as being overly restrictive. In England, the Institute for Practitioners in Advertising’s legal director Marina Palomba called the bill “unreasonable” and stated, “It’s absolutely right that official sponsors are protected, but there has to be a balance” (Fraser, 2005). Palomba further noted that the new legislation gives the event organizer “unparalleled power” (Fraser, 2005). A London 2012 spokesman dismissed criticism that the new Olympic Bill would prevent local businesses from becoming involved in the Games. He stated, “There is absolutely no intention of stopping businesses from becoming involved in the Games, quite the reverse” (Fraser, 2005).

Despite such assurances from event organizers, advertising practitioners worry that the current version of Olympic Bill will “rule out any sort of 2012 ‘halo effect’ for businesses in the UK” (Fraser, 2005).

Groom (n.d.) noted that another industry criticism is that the presumed combinations of infringing expressions from Columns A and B mentioned above are “arbitrary and unnecessarily restrictive.” In the most recent version of the Bill, however, there is greater clarity about the “concept of an association” such that if the use is not likely to suggest an association, this will constitute a defense to infringement of the LOAR (Groom, n.d.). The advertising industry recommended

three key revisions that would improve the current version of the Olympic Bill:

adding “intent to create a false or misleading association,” distinguishing “unfair association” from “mere reference,” and changing the language of the Bill to “avoid prohibiting legitimate reference to individual sponsorship or merchandising deals with teams and stars” (Groom, n.d.). Despite the concessions made at the request of the advertising industry found in the final version of the legislation, “many still question whether the Act strikes the right balance between the commercial interests of the Olympic Movement and its sponsors on the one hand and advertisers’ rights of freedom of commercial expression on the other” (Johnson, 2006b, p. 1).

While any special legislation enacted often contains “safeguards” to protect ordinary citizens and local businesses, striking the proper balance is often difficult. However, if one considers the basic “sponsorship protection” rationale that is the impetus behind enactment of the event-protection legislation, the concepts seem straightforward: “[Official] sponsors do not want others to free-ride on their investments and trade off the goodwill and publicity surrounding an event, thereby undermining the value of their official sponsorship and the viability of obtaining sponsorship for future events” (Mallard, 2007, p. 1). Thus, the legislation necessarily must address situations “when companies or advertisers make representations through advertising or other publicity that draw a connection in the public’s mind with themselves and major events—without the authorization of the event organizers” (Mallard, 2007, p. 1). The ongoing challenge in drafting such legislation is to properly and fairly achieve this objective without unduly impinging upon the rights of those parties not officially associated with the event.

Sponsorship Program Protection Strategies Judicial interpretation of the trademark legislation used to protect special sport events has been the subject of recent litigation brought by FIFA before the 2006 World Cup. In November of 2005, in a victory for FIFA and its official sponsors, the European Trademark Office (OHIM or Office for Harmonization in the Internal Market) ruled that only FIFA’s official sponsors could use marks such as “WM 2006,” “World Cup 2006,” “World Cup Germany,” “Germany 2006,” and “World Cup 2006 Germany” for commercial purposes (FIFA, 2005). Ferrero, an Italian confectionary company, had argued that FIFA trademarks were not valid since they did not possess distinctive character (FIFA, 2005). In April 2006, however, FIFA suffered a major setback when the German federal supreme court revoked protection of the “Fussball WM 2006” (Football World Cup 2006) mark using the rationale that the slogan “referred to a sports event and not to a body such as FIFA” (Noticias.info, 2006). The ruling is significant because it means that FIFA is no longer able to grant assurances to official sponsors that they have the exclusive right to use such a slogan in connection with advertising for the event (Noticias.info, 2006). Despite the supreme court’s ruling, FIFA can still protect the “Fussball WM 2006”mark as a “community trademark” in Europe (and consequently in Germany during the 2006 World Cup; Noticias.info, 2006). Commenting on the decision and the continued importance of protecting an event’s intellectual property, FIFA

Secretary General Urs Linsi stated:

Safeguarding the exclusive rights of our partners is an essential requirement for this, the world’s largest privately financed sports event, which generates costs of more than 600 million Euros for FIFA alone. Companies that seek to profit from the FIFA World Cup without making a contribution (jeopardize) the financing of the event through commercial partnerships. Protecting our trademarks is therefore of fundamental importance to developing football as a whole. Our trademarks are still protected but today’s decision does not augur well for the growth of our sport or for (organizers) of major sports events.





(Noticias.info, 2006, paragraph 4) This landmark decision by the German Supreme Court will significantly impact the strategies employed by future event organizers to protect the intellectual property of their special sport events. If event organizers cannot rely on the protections afforded to them by their domestic trademark legislation, as appears to be the case, it is believed that during the host country bid process, event organizers will need to be even more aggressive in demanding the enactment of special trademark legislation to supplement existing protections under the laws of the host country, as is currently the trend for the London 2012 Olympic Games.

Future Research The business and legal ambiguities inherent in the concept of ambush marketing, as well as the practical implications of event organizers’ sponsorship program protection strategies, suggest numerous avenues for future research. First, future research should more broadly examine the rights of all parties with regard to the complex marketing, management, and legal issues raised by ambush marketing.

580 McKelvey and Grady The analysis thus far provided in the literature has largely focused on the rights of sponsors and event organizers. The scope of this inquiry must be extended to analyze the rights of nonsponsors to maintain a market presence during an event, as well as analyze the commercial rights of local businesses while being cautious not to suggest an unauthorized association with the event. Two critical issues in need of further inquiry and analysis are (1) What rights, if any, should special event legislation carve out for nonsponsors (i.e., “honest practices” exemptions or safe harbor provisions)? and (2) Do provisions in the host city contract or in any special legislation enacted provide adequate safeguards such that nonsponsors and local businesses are able to market their goods and services during the event?

For example, determining how far to extend the radius for a “clean zone” would necessarily implicate the rights of nonsponsors and local businesses.

Future research should also address how to best measure the effectiveness of the aforementioned sponsorship program protection strategies used by event organizers of mega sporting events. While anecdotal evidence from event organizers currently provides limited insight in this regard, empirical analysis would provide event organizers and official sponsors with a more accurate assessment of the success of such strategies in providing adequate protection for the event organizers and its official sponsors. It would also better inform local legislators and future host cities as to the efficacy of current ambush marketing legislation and the need for more, or less, stringent measures in the future as its seeks to balance the rights of its constituents with the needs of event organizers.

Future research should also continue to explore why, in the presence of special event legislation with substantial remedial provisions, event organizers have largely been hesitant to use the courts to seek a remedy when instances of ambush marketing occur at their events.

Conclusion

With each successive special sport event, arguably beginning with the 1996 Olympic Games in Atlanta, new lessons have been learned and new strategies have emerged to enable event organizers to better protect their sponsorship programs from the negative impacts of ambush marketing. Concurrently, official sponsors have developed heightened expectations of event organizers to take increasingly aggressive measures to protect their financial investments.

The examination of sponsorship program protection strategies undertaken in this article suggests several overarching conclusions. First, event organizers’ use of the event hosting bid process has become of growing significance, although it should be noted that this strategy is not available to event organizers whose special events are not subject to a bid process (e.g., Major League Baseball’s World Series, NBA Championships). During this highly competitive bid process, event organizers are seeking to use their negotiating leverage to obtain stronger sponsorship program protection through measures that include enactment of special trademark legislation, creation of clean zones, and commitments to aggressive on-site policing of ambush marketing activity. As seen in the case of Beijing’s hosting of the 2008 Olympic Games, making certain payments to the host country or city contingent upon enforcement results signals yet another proactive step in event organizers’ Sponsorship Program Protection Strategies efforts to ensure the commitment of host countries and cities toward the protection of sponsorship programs. Although such a measure raises a host of evidentiary issues, it is one that other event organizers will likely consider imposing in future negotiations with prospective host countries and cities.

It is, however, unrealistic and naïve to assume that assurances or “guarantees” in the contracts between event organizers and host countries or cities can provide a “silver bullet” against the legal marketing activity of nonsponsors. Special trademark legislation may provide some measure of assurance for event organizers and their official sponsors, as well as viable legal recourse for the most blatant violations of such legislation. However, particularly in countries that value the concept of free enterprise, courts are likely to continue to view the practice of ambush marketing through a lens of “commercial pragmatism” (Hoek & Gendall, 2003a, p. 9), while placing a heavy onus on event organizers to prove the illegality of such.

Second, although event organizers have achieved a measure of success in securing special trademark legislation, the judicial interpretation of such legislation is still subject to the vagaries of the courts in which ambush marketing-related lawsuits are filed. As witnessed in the recent litigation involving the use of the term “Fussball WM 2006,” courts, when faced with the decision of protecting the intellectual property rights of event organizers and their official sponsors to the detriment of the free enterprise rights of local businesses, are just as likely to side with the latter. It is therefore incumbent upon event organizers to exert as much leverage as possible during the bid process to ensure that special trademark legislation and other forms of advertising restrictions anticipate and address, as specifically as possible, the legal gray areas of ambush marketing that could result in unfavorable judicial interpretation.

The need for increased specificity of the language used in special trademark protection legislation and other forms of advertising restrictions is further illustrated by the intense debate surrounding enactment of the London Olympic Games Bill.

Event organizers will likely continue to face debate in the efforts to achieve a proper balance between the protection of their interests versus those of the local business community and its citizens. As representatives of the latter contingent have argued, it has historically not been the responsibility of public authorities such as local governments to protect and enforce the trademark interests of event organizers and their official sponsors. Thus, the efforts of event organizers to lay much of the onus for sponsorship program protection on host country and city governments, arguably at the expense of the legal rights and interests of the local business community, will likely continue to be a source of contention for event organizers.

Third, the sponsorship program protection strategies discussed throughout this article reveal that the nature of the event may have some bearing on the success of some of the strategies employed. For instance, organizers of special sport events predominated by amateur athletes, such as the Olympics or NCAA, have historically positioned the mission of their organizations in a sympathetic light. These event organizers have, for instance, effectively used pre-event education and public relations initiatives to communicate the message that ambushing its events jeopardizes funding for its amateur athletes and programs (it remains to be seen whether the effectiveness of such sympathetic appeals may be eroded as these and other amateur athlete based sport organizations become increasingly commercialized). Obviously, this type of emotional appeal to potential ambush marketers is not applicable to 582 McKelvey and Grady professional athlete based sport organizations. Furthermore, consumers’ general lack of knowledge of sponsorship benefits and concern over ambush marketing weakens any potential appeal by event organizers and official sponsors.



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