Tuesday, May 08, 2012

Spy in the House of Trademark Maximalism: ambush marketing panel

The Evolving Nature of Ambush Marketing

Note that due to my blocked view, my attributions are even worse than usual—about 50% confidence in who said what once the discussion got underway.

Moderator: Kelly Maser, United States Olympic Committee (United States)

Ambush marketing: capitalizing on the excitement surrounding an event.  Costs of such events are astronomical in putting on the scope the public has come to expect. Funds come from broadcast revenues and sponsorships.  Property owners are relying on those sponsorships for ability to survive.  There would be no ability to send the US team to London without the corporate sponsors, so we need to protect that investment. 

Bruce P. Keller, Debevoise & Plimpton LLP (United States)

Oldest form is party-crashing: people show up at an event wearing T-shirts or holding up banners for something else. 

Hamburger chain: Raid a Nation’s (Nation’s Burger) put up near Raiders stadium; sounds just like Raider Nation, a slogan.  Taken down when lawsuit filed.  Arizona mattress seller lobbies for a new QB in a billboard: Peyton Manning, please sleep here (R&S Mattress).  Kulala airlines says straight out: we’re not the official airline of the WorldCup, but look at us anyway.  Michael Phelps does a Subway ad showing him heading up towards Canada, even though Subway was not an official sponsor of the Vancouver Olympics.

Dolores DiBella, National Football League (United States)

Ambush marketing results in lost ad revenue.  Devaluing a relationship can affect revenue far beyond the ambush.  Loss of control: advertisers and sponsors often have marketing guidelines, and ambush marketers don’t.  Harm to the brand: free riding is a big problem.  Exclusivity often drives the value of a relationship.  Shifting the spotlight to a competitor drives down the value to them. Disruption of marketing plans: events are years in the making; ambush weeks before an event harms the sponsor’s plans.

Keller: why the ambushers do this.  Why not if you’re on the outside looking in?  Can make economic and marketing sense; be seen as clever/creative; leverage preexisting sponsorship deals with athletes or performers participating in the event.  May offer an opportunity to negotiate official sponsorship later if you show ready, willing and able to play.  This happens on a regular basis: former sponsor turns into ambusher and vice versa.

Maser: arms race: ambushers get more creative, sponsors fight back, and so on.

Scott A. Bearby, The National Collegiate Athletic Association (United States)

Temporary restrictions on signs, samples, structures.  Ambush could be big billboard by nonsponsor at or near event site: if they wrap a whole building, could be very troubling. Thus get ordinances in place to prevent such things: “clean zones.”  Safety component: if they wrap whole floors, need safety restrictions/licensing requirements.  (Why isn’t that true all the time?)  Temporary ordinances often allow sponsors preferred status to do these kinds of things.  (Yikes.  Including exemptions from the safety requirements?  That sounds pretty bad.  Does being a sponsor give you magical safety net powers?)

Counter-countermeasure: ad just outside the clean zone.  Counter-counter-countermeasure: occupy the zone just outside the clean zone: rent big billboards just outside yourself.  And maybe increase the size of the clean zone while you’re at it.  (Why is the might of the government on the side of a particular private interest here again?  Because they bought it?  And people wonder why IP is getting such a bad reputation.)

Evolution: ticket back restrictions.  Old days were liability waivers; now restrict commercial promotins, in-stadium signs, clothing promoting a non-sponsor. Usher or security guard, seeing someone coming in with promotional items, can confiscate them.  PR backlash.  Do you want to tell someone to remove their clothing or turn it inside out?  Can in theory do that.

FIFA said that ticket holders couldn’t create an “unauthorized commercial association” with the World Cup or FIFA.  Includes using, wearing, possessing or holding promotional or commercial items.

Keller: another tactic is to give away tickets as a promotion. Many tickets now restrict that practice; not aware of any reported cases about it, but there have been litigated cases.  License now says that you can’t offer them as prizes.  Is it false advertising then to advertise tickets as giveaways?

Maser: companies will sometimes offer a trip to London and event tickets.  They say “we didn’t put the Olympic rings on this promotion,” but those tickets still can’t be used to promote a non-sponsor.

DiBella: Bavaria Beer provided Dutch fans with branded lederhosen: orange for the team, extra large pockets for beer.  In 2006, 1000 fans showed up with the lederhosen.  FIFA made them take off their pants.  Policy: Made plain orange pants available/didn’t make them take them off if all they had was underwear.  Bavaria may have chosen lederhosen just to get media attention.

World Cup 2010: Bavaria handed out unbranded orange minidresses to Dutch fans.  She notes that some people said there was a tiny label on the side.  These were sold to Bavaria customers.  Result: fans ejected and ringleaders arrested.  FIFA was criticized in the media.  Score: Bavaria 2-0.

Keller: in the internet era, even a C&D can be instantly publicized if sufficiently heavy-handed.  It’s always been true that if you send out a letter to someone else who wants publicity, it can get into the newspaper; it’s easier now.

Self-help: Regulate athletes’ conduct within event venues.  E.g. on the field, in post-game press conferences, etc.  If they’re an endorser of a competing product, still put the event sponsor product in front of them, e.g., Gatorade in front of them at press conferences when they’re bound to drink only VitaminWater so they can’t pick it up.  Deals with networks to avoid undue exposure to gate-crashers: hotline to broadcasters: don’t focus on section C-22 because there’s an ambush guy in there.  Another form of self-help: tell sponsors to maximize and trumpet official sponsorship.

Maser: Occupy the field.  Visa bought ads all over light rail for people going to & from Olympic venues.

Social media: not going to go away; have to figure out how to deal with it.  Bloggers may be fans but also fans of a competing company (how dare they?!).  UGC creates more problems: is it commercial speech? (Answer: no.)

In 2010 Coke was an official World Cup sponsor, but Pepsi produced a viral internet ad, Oh Africa, that was really effective in making people associate Pepsi with the World Cup, including for searches for “Pepsi World Cup,” much to Coke’s chagrin. In 2011, Pepsi was the official NFL sponsor.  What goes around comes around: Coke announced it would stream a video feed of its animated polar bear characters reacting in real time to the game.  The polar bears left the room during Pepsi ads.  Coke announced the stream would run on Twitter.  12% increase in Twitter traffic on #cocacola.  Created a Facebook page.  Already had 37 million FB likes; additional ads in animations on FB.  600,000 users by the end of the third quarter, when the hope was 15,000.  Had to rededicate some servers to keep up.  Also used YouTube for replay/sharing. 

Keller: the tip of the iceberg because often the TV screen and the computer are on at the same time now, but we will soon likely have split screens; offline/online promotions will often run with an event in real time.  That will increase the value of an ambush that can’t be stopped because it’s running alongside the event on consumers’ devices.

Maser: ability to create clips and send to your friends is very powerful.  Polar Bears and Oh Africa were clever and well-funded; companies were well advised about what they could and couldn’t do.  We deal with many other advertisers who are small. Peyton Manning guy didn’t have in house ad counsel.  Some ads are over the line—ambush and TM infringement.  You can get this taken down, but with social media those ads live even if they’re pulled down from the original source.

Bearby: 60% of people had a mobile content device within arms’ reach during the Superbowl.  Next year will be higher.  Pepsi had its own social media presence, with music from the ads, but it didn’t get the same buzz even though it was also trying to engage fans beyond TV.

DiBella: power of internet is that small voices can get heard, not just Coke and Pepsi.  Chick-fil-a’s Eat Mor Chikn v. Eat More Kale.  Dispute ongoing, with strong public presence; 2011 C&D got a lot more publicity than 2006 C&D.

Easy for third parties to reference event on Twitter: Domino’s Pizza tweet during 2010 Olympics—the damage can be done even if it’s quickly removed.  Domino’s tweet: order our new pizza and watch the opening ceremonies.  (Unsurprisingly, I don’t see what’s wrong with that.)  FB page also said: let us deliver so you can watch the Olympic ceremonies.  Legal department had no idea that it was going on—never vetted.  In-house: watch what your employees are doing and make sure that everyone understands the rules.  Hard to police employees’ tweets.

Bearby: hard to react in time; may need to teach a lesson so it doesn’t happen again.

FIFA released 2014 guidelines to educate the public on anti-ambush guidelines in traditional space and new media: rules on in-stadium conduct, use of FIFA marks on merchandise, on the internet, in SMS, MMS or similar mobile services, and on social media platforms—what kind of conduct by fans and third parties is permitted.  (Nice to know that it is FIFA, and not the law, that is making the rules for fans.)  FIFA word marks may be able to used descriptively in certain circumstances, while graphics should not be used on IM platforms, but word marks may often be used in editorial contexts.  (Often?  Also, FIFA is apparently claiming rights to stop a fan from choosing a visual soccer-related avatar.)  Yes, hard to explain to ordinary citizens, but trying to educate.  Similar dual focus on traditional space and new media in 2012 Olympic guidelines: clean zones, conduct at venues, where to get official merchandise and warning against purchasing counterfeits; prohibition on websites that create unauthorized association.  Simple and easy to follow can go a long way in preventing ambush before it starts, especially the unintentional kind.

Bearby: enforcement efforts—traditionally had the options of injunction, confiscation of merchandise, damages, and “clean zone”—most were linked to lawsuits.  Practical steps: credentials/conditions on entry, etc.  Internet age: litigation based enforcement isn’t effective because internet campaigns are easier to launch, shorter advance notice, takedowns are limited—DMCA only if copyrighted works are used.  Many practical steps traditionally taken by organizers don’t work.

Work with the medium: make twitter an official sponsor; create an official app (and send takedowns to Apple); search engine marketing.

Patchwork of international approaches.  A jurisdiction that isn’t subject to US law creates a challenge.

DiBella: a lot of entities have rules for where they’ll locate events: if you don’t have a local law against ambush marketing, we won’t come there.  INTA board resolution: balance the legitimate rights of TM owners and the public to use terms fairly and descriptively.

Keller: given SOPA/PIPA, too sensitive for legislation—will be left to event organizers.

Bearby: law is evolving. Must set expectations by contract or otherwise to give organizer ability to stop anything.  You don’t have infinite resources to stop every internet activity.  If they’re not using your marks, the law isn’t clear whether it’s illegal.

Maser: neverending battle.  There can be a major PR backlash from being too heavy handed, especially against mom & pop.  A lot of times those people don’t know the law and they tend to say okay once you explain it to them.  Sometimes you get folks indignant and want to fight in the media.  Work with media department to make them aware of the issues.

Okay, nonparenthetical editorial time: I understand that INTA is full of people who are largely on one side, which helps explain why they often seem so bewildered about why many ordinary people have little respect for IP law.  With respect to trademark, let me offer one answer: it’s because many trademark owners only occasionally and grudgingly concede that (1) consumers contribute substantially to the meaning and value of a mark, and therefore have interests of their own in using that mark to communicate, and (2) competition and free expression are at the very least limiting principles on the scope of trademark rights.  Nobody I know wants counterfeit drugs; what we don’t generally believe is that stopping counterfeit drugs has anything to do with creating a “clean zone” around sports events so that local brewers can’t advertise their products.  When I see TM owners refuse to engage with these arguments, except to announce that they’ll tolerate or refrain from acting against certain kinds of fan/descriptive uses, I find it hard to hope for public-regarding solutions coming from them.

1 comment:

Rebecca Tushnet said...

My fumble fingers accidentally deleted Seth's comment, which I'm reposting now:

Thanks for this. A bit ago, I wrote an article which examines the development of a mega
event organizer (MEO) right of association.

Shameless self-promotion: http://ssrn.com/abstract=1970149

The London Olympic Association Right (LOAR) is an example of a move in this direction.

The introduction of such a right reduces competition, further limits the freedom of commercial expression (and as you note private expression) and contributes to the "race to the bottom" among potential mega-event venues.

Anyway, thanks for your reporting at INTA.