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What to Keep in Mind When Entering Into a Sports Sponsorship

March 5, 2013

By Ken Beaulieu, senior director of marketing and communications, ANA

In 2011, Liberty Seguros, the Brazilian subsidiary of Boston-based Liberty Mutual Insurance, was announced as a national supporter of the 2013 FIFA Confederations Cup and the 2014 FIFA World Cup. This year, the property and casualty insurer became an official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams. These partnerships represent Liberty Mutual’s first major foray in the burgeoning world of sports sponsorship.

I recently asked Chris Sloan, assistant vice president and senior corporate counsel at Liberty Mutual Insurance, for his perspective on the legal implications of sponsorship. As you might imagine, there is much that brands need to be aware of.

“You really have to pay attention to the rights granted with the sponsoring entity,” said Sloan, who will participate in a panel discussion on sports sponsorship and brand promotion at the 2013 ANA Advertising Law and Public Policy Conference, March 19-20, in Washington, D.C. “Are you getting the right rights, and how can you exercise them? How do those rights fit into your overall media and advertising plans? The rights around your specific category — or bubble, if you will — need to encompass everything you touch as a company. In other words, you must make sure that how you define your category, how you define your bubble of exclusivity is correct.

“On the activation side, there are several legal issues that can crop up along the way. For example, you need to clearly understand how and where you can use the sponsorship logos and materials, including photos, films, and athletes; how you moderate and control messaging in the fast-paced world of social medal; and how you protect your exclusivity. You have to be able to react quickly, and have a plan for how you control something that may be going off track.

“One of the biggest issues is ambush marketing,” Sloan continued. “There is quite a bit of anecdotal evidence of how non-sponsors find ways to leverage big events without purchasing the rights to do so. The rights to take action against an ambush marketer — say, a competitor — generally rest with the sponsorship organization, since an ambush marketer will try to find some way to create the illusion that it is affiliated with the sponsorship or the event. So, it’s not so much that they’re using our logo or our trademark; they’re using the sponsorship organization’s trademarks to create a false affiliation. But in doing so, they’re stepping on our exclusivity bubble. It can occur innocently, maybe a restaurant throwing up a sponsorship sign or a larger company trying to create the illusion that it is one of the partners by showing up close to a sponsorship event or in close proximity to the event advertising. Those are the ones we really have to pay attention to. So when you negotiate a contract, this is one of those areas you really need to understand. In FIFA’s world, they often get legislation enacted in the host country giving FIFA special rights and special expedited avenues of recourse through the court system to get cease and desist and restraining orders against marketers that stray over the line. Ambush marketing has become almost a subspecialty in trademark enforcement.”

 

 

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