TITLE
The
Use of Competing Marks in a Corporate Sponsored Event
I.
INTRODUCTION:
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, [1]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 [2]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 [3]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 [4]Universal
Declaration of Human Rights of the United Nations, and the [5]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 [6]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 [7]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 [8]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. [9]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. [10]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. [11]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 [12]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. [13]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.”
[14]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 [15]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.
VIII. CONCLUSION
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.
[2]
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;
[3] 1987 Constitution ARTICLE XVI
GENERAL PROVISIONS Section 9. The State shall protect consumers from trade
malpractices and from substandard or hazardous products.
[4] The Universal
Declaration of Human Rights Article 3.Everyone has
the right to life, liberty and security of person.
[5] 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.
[7] 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;
[8] 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.
[9] 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
[10] 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.
[11]
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.
[12] 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.
[13]
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.
[14] 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.
