For a few weeks every four years all eyes turn towards the spectacle of sport that is the Olympic games. Despite the high costs associated with being a sponsor, a plethora of companies compete for the sizeable commercial benefits and exposure that being an official sponsor can bring. However, companies that are not official sponsors also covet the commercial benefits of the Olympics by linking their brand and products to the Olympics through marketing and advertising. Non-sponsors can increase their brand exposure and sales by riding the wave of Olympic fever. For example, non-sponsors might employ marketing like “enjoy watching the Olympics with [XXX] and cheer for Chinese Taipei!”. However, by advertising on the back of the Olympic fever, these non-sponsors significantly reduce the benefits of exposure that were originally expected by the actual sponsors; especially given that nowadays Olympic sponsors often invest hundreds of millions of USD in sponsoring the Olympics.[1] If sponsors are unable to achieve their commercial goals despite investing so much, then who would be willing to sponsor the Olympics in the future? Without sponsorship, the extravagant opening ceremonies and sporting showcases that the Olympics is known for would not be possible. This would leave fans of the Olympics disappointed. Therefore, it is understandable that the organizers of the Olympics want to restrict non-sponsors from “ambush marketing.” But what kind of legal regulations are used to limit ambush marketing?

I. What is Ambush Marketing?[2]

Ambush marketing refers to the practice where advertisers that are not sponsors of an event associate their marketing with that event to generate exposure and consumer attention. By doing so, non-sponsors can create a connection with the event and their brand. These events are typically high-profile sports events. The non-sponsors’ marketing can even lead consumers to mistakenly believe that they are an official sponsor, thereby increasing their opportunity for exposure.

For example, Nike, often regarded as the “master of ambush marketing,”[3] was not an official sponsor of the 1996 Atlanta Olympics. However, through relentless marketing strategies that linked Nike to the Olympics, Nike achieved a consumer recognition rate of 22% during the event, surpassing the official sponsor Reebok’s 16%.[4] Additionally, over 70% of the audience mistakenly believed that Nike was an official sponsor.[5]

When non-sponsors are able to ride on the coattails of an event’s popularity and reap the benefits that sponsors expect to gain without incurring significant costs (such as sponsorship fees), it constitutes a form of free-riding. In the long run, this undermines the quid pro quo nature of the relationship between sponsors and event organizers. Ultimately, this makes it harder to host events such as the Olympics. Therefore, organizers of global sports events, such as the International Olympic Committee (IOC), actively take measures to prevent ambush marketing to protect the interest of sponsors, maintain their willingness to sponsor, and ensure the smooth organization of the event.

II. Limitations of Taiwan’s Trademark Act and Fair Trade Act in Combating Ambush Marketing

1. The Trademark Act

Registering a trademark is a common countermeasure to this kind of free-riding. The IOC has registered a variety of Olympic-related trademarks in Taiwan, including the word “Olympic,” logos, mascots, and combinations of city names and years.

However, if the IOC claims trademark infringement, non-sponsors may argue that their use falls under “descriptive use,” which is where a term is used to describe the thing rather than to identify the source as a trademark. Thus, non-sponsors could use this as a basis to argue there is no infringement. Commencing contentious action in such situations would not only significantly increase the cost of enforcement for rights holders, but “descriptive use” is also a category of fair use under the Trademark Act, meaning rights holders would be unable to exclude such use through their trademark rights. If a non-sponsor was to use the marketing copy “enjoy watching the Olympics with [XXX] and cheer for Chinese Taipei!”, if a claim of infringement was brought against them, then the non-sponsors might argue that because they are using the word “Olympics” merely to describe the event, not to indicate the source of their products or services, it is not trademark use. In this situation, enforcing trademark rights to handle instances of ambush marketing has its limitations.

2. The Fair Trade Act

There are provisions in Taiwan’s Fair Trade Act that regulate advertising and marketing that affects the trading order. This includes Article 21 for false advertising and Article 25 for deceptive or obviously unfair conduct.

However, taking the example “enjoy watching the Olympics with [XXX] and cheer for Chinese Taipei!”, non-sponsors may argue that such marketing copy does not lead to the misunderstanding that they are the official sponsor, thus neither constituting false or misleading advertising nor free-riding on other businesses’ goodwill to suggest that they have a relationship with the event.[6] Here, a businesses’ goodwill refers to the particular image held by trading partners or the overall brand recognition.[7] However, ambush marketing does not necessarily involve making associations with another brand’s image so may not lead to free-riding off another businesses’ goodwill.[8] In this regard, if the IOC wants to use the Fair Trade Act as a basis to prevent ambush marketing, it may not only incur considerable costs but also face difficulties achieving its purpose due to the limited types of activities that the Fair Trade Act regulates.

III. Drafting Legislation to Combat Ambush Marketing

In Taiwan, existing laws seem unable to regulate ambush marketing. This is also a problem faced by many countries wishing to host the Olympics. Therefore, to combat ambush marketing in a more expedient and comprehensive manner, many countries that host or seek to host the Olympics have specifically enacted legislation aimed at tackling ambush marketing by “prohibiting the unauthorized commercial use of Olympic elements” to regulate the free-riding behind ambush marketing. Countries that have enacted such laws include the United States,[9] the United Kingdom,[10] Germany,[11] Australia,[12] China,[13] and France.[14]

The intensity and scope of ambush marketing regulations vary from country to country, but generally speaking, under these regulations, even if Olympic-related elements are not used as trademarks, but they (especially the elements of the five rings and the word “Olympic”) are used in a descriptive manner for commercial purposes, then such commercial use could still violate the regulations and result in legal liability.

For example, the United Kingdom, jokingly referred to as having an “Olympic brand police” during the London 2012 Olympics,[15] first enacted the Olympic Symbol Protection Act 1995 and later supplemented it with the London Olympic Games and Paralympic Games Act 2006. Under these regulations, using “the Olympic symbol, Olympic motto, or a protected word (including Olympiad, Olympian, and Olympic),” or “a representation of something so similar to the aforementioned elements as to be likely to create in the public mind an association with the Olympics, the Olympic Games or the Olympic movement” in the course of trade constitutes infringement.[16] Under these rules, many uses of Olympic elements have been prohibited. Examples include the Birmingham Royal Ballet, which was required to change the name of a performance that shared the Olympic motto “Faster, Higher, Stronger.” A butcher shop in southern England, which was reportedly told to take down a sign showing five sausage rings. And the University of Derby, which was forced to remove a banner that said “Supporting the London Olympics.”[17]

Returning to our example of “enjoy watching the Olympics with [XXX] and cheer for Chinese Taipei!”, because it involves the “commercial use” of “Olympic elements,” such marketing could be illegal in countries that have enacted special laws to restrict ambush marketing of this kind.

IV. Conclusion

With the 2024 Paris Olympic Games on the horizon, it’s worth noting that although Taiwan does not have any specific legislation preventing ambush marketing, the numerous multinational companies from Taiwan should pay particular attention to the relevant regulations on ambush marketing in the countries where they conduct marketing promotions to avoid potential infringement.

This is a translation of the original article in Chinese, which can be found here. Translation by George Bobyk.

Because the content of this article involves information from multiple jurisdictions, despite all efforts to ensure accuracy, please refer to the original sources independently and interpret them when citing relevant information.

For more information on advertising or marketing compliance matters in Taiwan, please contact Ling-ying Hsu at lhsu@winklerpartners.com.

Written on 18 June 2024 by Ling-ying Hsu and Helen Chen.

Translated on 26 July 2024 by George Bobyk.

[1] See Yahoo News (2024), “Louis Vuitton Case for Paris Olympic Torch Unveiled! LVMH’s TWD5.2 Billion Top-tier Sponsorship” (https://tinyurl.com/35hcych5).

[2] See Tsai Mu-Chueh (2010), “A Study of How Ambush Marketing Is Regulated- Focus on Trademark Law and Unfair Competition Law” (MA thesis, National Taiwan University College of Law), pp.7-8.

[3] See The Guardian, “Does ‘ambush marketing’ work?” (https://www.theguardian.com/media/2010/jun/17/ambush-marketing-world-cup).

[4] See Wu Hui-Chin and Li Hui-Ying (2020), “Exploring Strategies to Respond to Ambush Marketing in Mega Sporting Events,” Quarterly of Chinese Physical Education, 34:1, p.3.

[5] See QQ.com (2022), “With the Winter Olympics on the Horizon, What are the Rights and Wrongs of Ambush Marketing” (https://new.qq.com/rain/a/20220116A09EJK00).

[6] See Fair Trade Commission Disposal Directions for Article 25 of the Fair Trade Act, Section 7, Paragraph 2, Subparagraph 2, Item 1.

[7] See Liu Kung-Chung (2002), “A Study on the Application of Articles 20 and 24 of the Fair Trade Act to Cases of Counterfeit Goods and Trade Dress,” in Fair Trade Commission (editor), Proceedings of the 9th Conference on Competition Policy and the Fair Trade Act, p. 287.

[8] See Tsai Mu-Chueh, same as footnote 2 above, pp. 158-159.

[9] See Tsai Mu-Chueh, same as footnote 2 above, pp. 172-174; related laws available here: Ted Stevens Olympic and Amateur Sports Act of 1998 (https://uscode.house.gov/view.xhtml?path=/prelim@title36/subtitle2/partB/chapter2205&edition=prelim).

[10] See PR Newswire (2012), “Restrictions on ‘Olympic Marketing’ in English News Releases” (https://www.prnasia.com/blog/archives/2569); related laws available here: Olympic Symbol etc. (Protection) Act 1995 and London Olympic Games and Paralympic Games Act 2006 (https://www.legislation.gov.uk/ukpga/1995/32/contents; https://www.legislation.gov.uk/ukpga/2006/12/contents).

[11] See Hogan Lovells Engage (2019), “German courts set advertising stage for the 2020 Olympic Games in Tokyo” (https://www.engage.hoganlovells.com/knowledgeservices/news/german-courts-set-advertising-stage-for-the-2020-olympic-games-in-tokyo_1); related laws available here: OlympSchG (See English introduction: https://hal.science/hal-01369724/document, pp. 41-42).

[12] See Chris Davies (2018), “Ambush marketing and the Australian Olympic Committee”, James Cook University Law Review, 24, pp. 197-199; related laws available here: Olympic Insignia Protection Act 1987 (https://www.legislation.gov.au/C2004A03436/latest/text).

[13] See Beijing Municipal Intellectual Property Office (2021), “China Intellectual Property News: Highlights of Intellectual Property Protection in the Tokyo and Beijing Olympic Games!” (https://zscqj.beijing.gov.cn/zscqj/sjd/mtfb21/11129207/index.html); related laws available here: Regulations on the Protection of Olympic Symbols (http://www.olympic.cn/rule_code/rules/2018/0701/374980.html).

[14] See Ashurst (2024), “A Business Guide to Navigating the 2024 Olympic Games” (https://www.ashurst.com/en/insights/a-business-guide-to-navigating-the-2024-olympic-games/); related laws available here: Code du sport (See English version here: https://french-business-law.com/french-legislation/legiscta000006137758-legiscta000006151588-chapter-i-the-french-national-olympic-and-sports-committee/).

[15] See BBC NEWS Chinese (2012), “London 2012: Olympic sponsors are everywhere” (https://www.bbc.com/zhongwen/trad/sports/2012/07/120716_olympic_sponsorship).

[16] See PR Newswire, same as footnote 10 above.

[17] See BBC NEWS Chinese, same as footnote 15 above.