The Use of Competing Marks in a Corporate Sponsored Event
A check, three stripes, a crocodile, an alligator, a bitten apple, the letter M…a single look from these and people would know that those images talk about shoes, bags, shirts, computers, gadgets, foods and the like. Gone were the days when people need to peddle their products for such to be known. Now, given the right package and a timely exposure, a product, an idea, or a creation can hit it big time with just a click in the internet, or a flash of a camera. Indeed, trademarks are as important as reputations, as valuable as integrity, and as trustworthy as good will. Once established and known, trademarks charm consumers, draw investors, invite fortune and even entice competitors to infringe on the same. For trademarks to be recognized, advertisement is the key.
According to the 1987 Constitution, the advertising industry is marked with public interest. It does not merely offer the public with information. Advertisement encourages people to purchase or patronize a particular product, and circuitously serves in diminishing cost, cutting prices, and increasing competition. With the overabundance of goods and services presented in the market today, advertising performs an essential role in the economy. Some advertisements may be deceitful, untrue, misrepresenting, or dishonest. It is therefore, necessary that this industry be regulated by law for the protection of consumers and the promotion of the general welfare. A deeper and much stronger form of advertisement is sponsorship.
Sponsorship is considered a qualitative medium and it endorses a company in association with the sponsored party. The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice defined the term “sponsorship” as a contractual agreement between the sponsor and sponsored party for their mutual benefit.
Due to the rigid competition among various companies in advertising their products, various strategies, and schemes are adopted to deceit, misrepresent, or give the consumers false impressions, hence, laws must be passed to protect the consumers, advertisers, sponsors, as well as the sponsored parties. Our Constitution specifically mandates our legislative for this kind of protection. However, in protecting their rights, the rights of the third persons must not be prejudiced.
In answering that the use of a competing mark in a corporate sponsored event does not generally violate the property rights of the sponsor, it must be emphasized that a third party who exercises his right to freedom of expression and his right to the property, should not be jeopardized by the sponsor's want to dominate the sponsored event with exclusivity.
II. Rights Affected
Trademarks and sponsorships are protected by contractual agreements, Intellectual Property Code, Civil Law, the Constitutional right to property, and other International laws and treaties, while the use of a product embraced by a trademark by a third person is protected by the Constitutional right to the freedom of expression and also the right to property. Trademark is about protecting things that identify a business in the marketplace. Sponsorship advertises the trademark, and the use by a third party of a competing mark, is an obstacle for a sponsor to dominate the event.
In the case at bar, the rights involved are the rights of the third persons who used a product with a competing mark against the mark of the sponsor in a corporate sponsored event, and the rights of the sponsor. As mentioned in the preceding paragraphs, sponsorship is a deeper and wider way of advertising. Sponsor's rights are protected by the contract between the sponsor and the sponsored party, and the Intellectual Property Law. The main objective of sponsorship is to provide a reliable advertisement of an individual's ability to dominate or defend an area from other competitors and potential opponents.
Due to the sponsor's effort to support the event, the sponsor is given the benefit and opportunity to introduce to the world or the audiences his product. The strategic placement of a logo that charms countless eyes to an iconic mark can be a real game changer for any company. Wherefore, since it is the sponsor who was given the authority to advertise his product to such event, he should be protected from the intrusions of competitors who must be excluded. This notion however, is not absolute. The rights of the sponsors may be defeated by a person who uses a product with a competing mark is by way of "ambush marketing" of sponsored properties but as well as the use by a third person of a mark which was done ordinarily or in the exercise of his right to freedom of expression.
Typically, a person attending the event would care less about the sponsors of the event. People would rather give more concern on the event itself and most of the attendees would spend more time in choosing what to wear or what to bring than in focusing on who the sponsors are. People usually express themselves on their choice of shirt, their bags, shoes, and the like. What people use are the extensions of their personality. To intrude on a person's choice on what to use to give way to a sponsor of an event is a blatant violation of a person's right to liberty in expressing himself.
In the heirarchy of rights embedded in the Universal Declaration of Human Rights of the United Nations, and the Bill of Rights of our Constitution, the law provides that all persons have the right to life, liberty, or property. If we are to interpret the law in the viewpoint of a person who offers views or theories on profound questions based on logic, one could say that since the right to life and liberty were mentioned first, the right to property would be in the third priority. This was not actually the intent of the law. In a case ruled by the Supreme Court, it was decided that the three rights are on equal footing and the first should be interpreted and given the same force and effect as the last. Of course, it would vary depending on the situation.
The right to property carries with it the right to use and abuse the property and to exclude others from using it. Properties may be tangible or intangible. An example of a tangible property is a real property such as land. If a person wanted to exercise his freedom of expression, such as for example, to hold a rally on somebody's property, the owner of the land has the right to protect his estate from intruders and the other person who wanted to gather or demonstrate on his property must first seek the land owner's consent. In the case of an intangible property such as a trademark which is an intellectual property, the owner of the trademark has the right to exclude others from infringing or using his trademark. Sponsoring an event to advertise a trademark or a product is a property right and the sponsor has the right to exclude others from infringing or intruding on his property. This right by the sponsor is absolute if the event is a sponsor-owned activity or event but not if the event is only a sponsored event. These two are different. According to The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice a sponsor-owned activity or event refers to a property which gives the impression of a sponsorship but where the sponsor and the sponsored party are the same entity. For examples are the Milo Sportsfest or the San Miguel Octoberfest. The sponsored parties in these events as well as the sponsors are the same entities. On the other hand, sponsorsed event is an event in which the sponsored part and the sponsor are two different entities from which commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor’s image, brands or products and a sponsorship property, in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits. Examples are the Wimbledon, the FIFA, Olympics, Formula One and so on. The sponsored parties in these examples may have different sponsors and the sponsored parties and the sponsors are different entities.
The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice defined the term audiences in these. The term audience is not only confined to those who attend to the event but also to those who watched the event on the television, internet, or video, or read on the newsprint, magazines, or pamphlets, or saw the event through photographs. These individuals are the third persons to whom the products are being advertised. They have the right to express themselves in the event, to enjoy the event itself with or without the added advertisements of sponsors. People go to an event mainly because such event triggers their passion for an activity which the event holds such as a fashion show, a sports event, an art exhibit, and the like. They do not attend mainly because of the sponsors. Most often than not, interruptions in the event such as words from sponsors or commercials are not appealing to the audience. This is usually one of the portions when people go to rest rooms, which gives the impression that the audience gives sponsorships less of their attention. The events that people choose to go to, the clothes that people wear, the brands that people prefer, the marks that somebody would want to be identified with, are the ways of how people express themselves. These are the extensions of one's personality. These are the ones that matter most to people. Hence to allow the sponsors to limit the choice of the audience on what mark to use is an intrusion on their right to freedom to express their choice.
III. Harmonizing Freedom of Expression and the Right to Property
Conducive to the exercise of one’s right to freedom of expression, is the unrestricted right to the use of the property. Thus, the right to property is one of the most vital and one of most significant in determining an outcome of whether there was truly a valid exercise of the right to freedom of expression. Does this mean that the right to property ranks higher than the right to freedom of expression in the hierarchy of rights? I believe that it is not necessarily so. To validly exercise the right to freedom of expression, such right must first be harmonized with another's right to property, however in the event that there would be a disparity between the two, the circumstances surrounding each case must first be considered. How do we maintain the equilibrium between a landowner’s right to property and a protestor’s right to free speech? Or in this case, how do we keep steady the stand between the advertiser's intellectual property rights to the audience's right to self expression? If property rights are carried out extremely, it would imperil the universality of freedom of expression and consequently weakening democracy. On the other hand, if the rights to freedom of expression are taken with the highest consideration, it would threaten the substance of the right to property. So how do we harmonize the right to freedom of expression and the right to property? Simple…
The exercise to the right to property, as well as the right to exercise freedom of expression have limitations. Both Rights are in equal footing in the hierarchy of rights. Having said so, the way to harmonize these two in the case at bar is to distinguish first the two types of sponsorship. As stated in the previous paragraphs, there are two types of sponsorship, the first is the sponsor-owned activity or event wherein both the sponsored party and the sponsor are one entity. In this type of sponsorship the sponsor has the right to exclusivity being the owner not only of the trademark but also of the sponsored event. The sponsor therefore has the right to exclude all intruders from usurping the said sponsor property. In this type of sponsorship, other advertisers, trademark owners, as well as third parties or the audience may not be allowed to use competitive marks in the event and in this case the exercise to the right to property prevails over the right to exercise freedom of expression. On the other side of the coin, the sponsored activity or event type of sponsorship wherein the sponsored party and the sponsor are different entities, the sponsor does not have exclusive right to exclude other marks to intrude the event unless the contract of agreement between the sponsored party and the sponsor says so. In this regard, the audience must be aware of the said provisions for the audience to be warned that in the event that there are violators, they will be prevented from participating in the event or said violators will be dealt with accordingly. Otherwise, without the said provisions in the contract, the exercise to the right of the freedom of expression should not be curtailed.
IV. Types of Sponsorship Further Demonstrated
To demonstrate, let us take for example the Olympics and the The Walt Disney World Triathlon. These two events harbor one of the greatest number of audiences in the whole world. The extreme degree of marketing that accompanied the events is overwhelming as it controls over the interests of the media and the entire world. For this reason, these two events make them one of the most efficient international corporate marketing display in the planet. This is the reason why corporations, including the biggest ones whose trademarks rule over the lives of millions of people, and whose famous brands dominate the market, are very much willing to give a chunk of their shares to support the said events for the benefit of being associated to the said sponsor property and the right to be part of the program.
The two events are however not similar. While the first mentioned event opens to all possible advertisers or sponsors, the other event shuts them out. In the Olympics, there are a number of sponsors while in the Walt Disney World Triathlon there is only a single sponsor. The latter event is an example of sponsor owned event wherein the sponsor may prevent other parties from using other competitive marks while attending such activity. Consequently, the sponsors have the right to dominate the use of their marks or brands as official to be patronized by the audience, specifically Disney products in the form of shirts, hats, accessories and the like to the exclusion of other competitive brands such as Looney tunes, Pixar, and so on. This right of the sponsor may be invoked against the whole world. A person may not be permitted to enter or attend the activity if such person is using a competitive mark, whether or not such use is in the form of ambush marketing or not. The former event on the other hand is a sponsored event wherein the sponsor may not demand exclusivity. Since the event is not owned by the sponsor, the use of competitive marks in a conventional or mundane way nor through ambush marketing should not be disallowed, as this would interfere the rights of a person. This is not however practiced in some parts of the world. In Athens last 2004 Olympics, the Greeks and The Olympic Partner ("TOP") program, managed by the International Olympic Committee (“IOC”) imposed that the watchers at the Olympics would not be allowed to be admitted at the event unless they toss out their foods and drinks of companies which are not official sponsors. Those who were also wearing apparels, shoes, bags or accessories with competitive marks not authorized as sponsors. Such practice should not happen here in our country unless a law is passed no sponsor should restrict the use of a person of a product in an event which is not a sponsor owned event whether the use is in a way of an ambush marketing or not.
V. Ambush Marketing vs Non Commercial Use
Companies with competitive marks will find ways to connect their marks with an event and capitalize on the attendant good will without authorization from the event organizers. The Northwestern Journal of Technology and Intellectual Property defined the term "ambush marketing". Ambush Marketing is a scheme which results in making it appear to the public that a trademark or brand or a product or service is associated with the event to gain a free advertisement. For example, wearing shirts, hats or accessories with bold and distinguished competitive marks which would steal the attention or which would capture the interests of the media to the prejudice of the official sponsors of the event. The Consolidated ICC Code of Advertising and Marketing Communication Practice defined the rule with regards to "ambush marketing". A stimulating or suggestive woman wearing a sensual apparel with a bold logo of a competitive mark which captures the attention of the audience or the cameras, thereby having a free ride or a free advertisement of the product or the brand in the event is ambush marketing. Such person is immediately transformed into a live, walking billboard. On the other hand, an ordinary spectator of the event wearing a simple shirt in which the competitive mark is not obvious nor would attract the interest of others is not ambush marketing but rather such person is wearing the shirt as his choice, or as part of his image for noncommercial use. From this viewpoint, mere use of a competitive mark in a corporate sponsored event is not always ambush marketing. In ambush marketing the right to freedom of expression of a third person may be defeated as against the right to property of the sponsor in a sponsor owned event but not in a sponsored event, unless there is a law saying so or there is a provision in the ticket, or a public information saying so, whereas in ordinary, noncommercial use the rights of the third person to freedom of choice and freedom of expression should triumph over the intellectual property right of the sponsors specially in this case which is a sponsored event and not a sponsor owned event.
Generally, the sponsors and the sponsored party in a sponsored event must protect each other and both must benefit in the relationship as provided in their contractual agreement. Both have the responsibility to guarantee or safeguard each party's interests and that both must take measures to resist or prevent ambush marketing but again such measures must not collide with the rights of the general party. This principle is supported by the provisions of The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice. Henceforth, in combatting ambush marketing the rights of the third persons must also be safeguarded. In the contractual agreement between the sponsor and the sponsored party, both parties must also take in consideration their audiences. The audience should be clearly informed of the existence of a sponsorship with respect to a particular event, activity, or programme if the sponsored party opted to give exclusive rights to the sponsors. The audience must also respect both the sponsors and the sponsored party.
VI. Use of Competitive Mark Not Unlawful
In our country, our Courts give maximum force and effect to the Intellectual Property Code and to international covenants providing protection to well-known trademarks. Our long line of jurisprudence had rouse awareness of trademark ownership. However, our laws are on the side of ambush marketers since ambush marketing does not involve conventional unlawful undertakings such as trademark infringement or manufacturing of counterfeit goods. Ambush marketers campaign using their own marks in an event and do not infringe on other company's mark, hence an action for infringement will not succeed. There was no unauthorized use of registered trademark or service mark. Unless and until our laws would provide specific provisions in contradiction with this kind of activity, ambush marketing is not illegal and unless and until the tickets sold to spectators of an event would specifically disallow the use of competitive marks, ambush marketers should not be prevented from witnessing the event and should not be excluded from it except if such activity is a sponsor owned activity.
If ambush marketing is not illegal per se then ambush marketing falls within the purview of freedom of expression and between freedom of expression and the intellectual property in this case, the scale must tilt in favor the former. It is a well settled rule that there can be no prior restraint on expression. This rule emanates from the constitutional command that “[n]o law shall be passed abridging the freedom of speech, of expression, or of the press x x x.” This well- settled rule has exceptions which are pornography, false or misleading advertisement, advocacy of imminent lawless action, and danger to national security. All others are not subject to prior restraint. The power of Congress to impose prior restraint on false or misleading advertisements emanates from the constitutional provision that the “advertising industry is impressed with public interest, and shall be regulated by law for the protection of consumers and the promotion of the general welfare.” Prior restraint on the other three may only be invoked if the situation would pass the "clear and present danger test".
VII. Ambush Marketing: Not False/Misleading Advertisement but Only Smart Advertising
There is false or misleading advertisement if it is likely to cause confusion or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. Consumers or the audience in general are assumed to have a sensible degree of experience, knowledge and sound judgment, and to be rationally observant and prudent. Mere use of a competitive mark does not create a false or misleading advertisement. If a prudent consumer would not be confused as to who the real sponsors are, there is no false advertisement to speak of. Sponsors should protect their interests by providing restrictions on the tickets or by disseminating information to let the public be aware of who the official sponsors are. Ambush Marketing may be unethical, cunning advertisers call it smart advertising, sponsors name it parasitic advertising, but the good side of it is that it allows competition and it increases the value of the sponsored property. In this case, while sponsors dominate the billboards, the stage, the screens, the walls, the hand outs, and the tickets with their marks, ambush marketers uses people, to advertise their brands through their use. An ordinary prudent man can identify who the real sponsors are while being aware of the endorsement made by the ambush marketers. There was no confusion and so there was no law violated.
While sponsors may be threatened and be prejudiced by the ambush marketers or ordinary users of competitive marks in the sponsored event, such apprehension is not enough to distort the freedom of expression. People go to an event to enjoy not to be exposed to endorsements. Neither ambush marketing nor the ordinary use of competitive mark is false or misleading advertisements. Consumers may be perplexed about the sponsorship only to the extent that they thought about it but it doesn't necessarily mean that sponsorships would sway the audience from patronizing their products. As stated, they are presumed to have a practical amount of understanding, familiarity and comprehensive judgment as to what marks are better for them whether such marks are owned by sponsors or not. The most that the sponsors would gain would be the privilege, and a wider range of exposure for the audience to see and for the other people from other parts of the world to be aware of their marks with the hope that in due course, people would patronize them. There is a risk that ambush marketing could eventually harm the capability of event organizers to host ostentatious and successful events if ambush marketing would discourage large multinational corporations from being official sponsors. Nevertheless, the allure to large corporations of the world-wide exposure that results from sponsorship of big events will never be weakened by market flaws such as ambushers to the point of compromising the budgets of event organizers. Instead ambush marketing emboldens organizers to exert more efforts to frustrate intellectual property violations, and unethical acts, and increases the awareness of intellectual property rights worldwide. Disputably, ambush marketing offers an encouraging unrestricted market force. Henceforth, ambush marketing, though unethical, as well as the mere use of a competitive mark should not thwart the right to exercise freedom of expression. Unless there is a law which will prohibit such, and until that law passes the test of constitutionality, the use of a competitive mark in a corporate sponsored event should not be restrained, since this is the exercise of our freedom of expression which is an extension of our identity, the reflection of our choices, the manifestation of our ideals and the essence of our democracy.
 International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice “sponsorship” refers to any commercial agreement by which a sponsor, for the
mutual benefit of the sponsor and sponsored party, contractually provides financing or other support in order to establish an association between the sponsor’s image, brands or products and a sponsorship property, in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits;
 1987 Constitution ARTICLE XVI GENERAL PROVISIONS Section 9. The State shall protect consumers from trade malpractices and from substandard or hazardous products.
 The Universal Declaration of Human Rights Article 3.Everyone has the right to life, liberty and security of person.
 1987 Constitution ARTICLE III BILL OF RIGHTS Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.
 The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice the term “sponsor-owned activity” refers to a property which appears to be a
sponsorship but where the sponsor and the sponsored party are the same entity; for instance an event created and owned by a company/organization for which it also has the intention or effect of being perceived as the sponsor of the event;
 The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice term “audience” refers to the public, individuals or organizations to which a sponsorship property is directed.
 Northwestern Journal of Technology and Intellectual Property Volume 3 Issue 2 Spring Article 6 Spring 2005: Strict regulations by the Greeks and the IOC dictated that spectators at the Olympics could be refused admission to events unless they discarded food or drinks made by companies that were not official sponsors.32 Fans were allowed into the Olympic complex with other food and beverage as long as it was the product of an official sponsor. Olympic staff was also trained to check for t-shirts, hats, and bags displaying
 Northwestern Journal of Technology and Intellectual Property Volume 3 Issue 2 Spring Article 6 Spring 2005: Ambush marketing refers to the direct efforts of one party to weaken or attack a competitor’s official association with a sports organization acquired through the payment of sponsorship fees. In a broader sense, rather than such direct and intentional misrepresentation, ambush marketing refers to a company’s attempt to capitalize on the goodwill, reputation, and popularity of a particular event by creating an association without the authorization or consent of the necessary parties.
 The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice “Ambushing” of sponsored properties: No party should seek to give the impression that it is a sponsor of any event or of media coverage of an event, whether sponsored or not, if it is not in fact an official sponsor of the property or of media coverage.
 The International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice The sponsor and sponsored party should each take care to ensure that any actions taken by them to combat ‘ambush marketing’ are proportionate and that they do not damage the reputation of the sponsored property nor impact unduly on members of the general public.
 1987 Constitution Article 3 Bill of Rights Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.
 G.R. Nos. 164785 and 165636 — SORIANO vs. LAGUARDIA: This well-settled rule, however, is subject to exceptions narrowly carved out by courts over time because of necessity. In this jurisdiction, we recognize only four exceptions, namely: pornography, false or misleading advertisement, advocacy of imminent lawless action, and danger to national security. Only in these instances may expression be subject to prior restraint. All other expression is not subject to prior restraint.