The Hindu Business Line : IP hurdles for brands heading to Beijing Olympics

The 2008 Beijing Olympics are only months away and brand owners are keen on reaping the benefits of marketing opportunities in China. “But companies must take note of the risks, particularly concerning IP (intellectual property) and brand management,” cautions a new book from Wiley ( www.wiley.com).

The opportunities are undeniable, but sports sponsors should be careful as they enter the Chinese market, write Ms Rebecca Ordish and Mr Alan Adcock in ‘China Intellectual Property Challenges and Solutions: An Essential Business Guide.’

IP protection

Since sports marketing is, after all, about the power of brands, it is important, say the authors, that the companies should ensure the protection of their investment, from an IP perspective. Event management is still in its early stages in China, and local sports marketing skills are still thin on the ground, they add.

First among the ‘key risk areas’ is to know who you are negotiating with. “The state has the right to manage athletes’ commercial rights, because most athletes in China are supported by state-run sports organisations.”

Therefore, the sponsors need to confirm that the relevant national or local authority which is determined by the player’s team, has approved the sponsorship arrangement, and that the athlete has given his or her approval for use of their image, the book guides. “Companies should expect sports sponsorship agreements to involve the sponsor, the athlete, and the state.”

RegistraTion of names

The second risk area mentioned in the book is the protection by the ‘rights holders’ of the relevant IP in the event. In addition to registering the more typical items, such as event names, team logos, and event logos, it is possible to trademark some less common items in China for greater protection, the authors inform. They cite the example of how for the Athens 2004 Olympics the underwear company Beijing Dani’aier Clothing Co Ltd registered the competitor number of a famous Chinese hurdler, Liu Xiang, ‘1363.’

Interestingly, China allows registration of athletes’ names as trademarks, something that is not possible in many countries! The procedure is fairly simple: ‘the person must give his or her consent, and the name must be distinctive as a trademark.’ But such ease can work against the legitimate owner of the name, too. For instance, “Lin Dan, China’s world top-ranking badminton player, found that his name was already registered for health products when he tried recently to register it as a trademark.”

Queer it may seem, but unlike as in the US, portrait rights are available in China, to offer protection for an image. “Use of a citizen’s portrait in China for profit without consent is prohibited… Chinese athletes are increasingly aware of the value of their portrait rights, and several athletes have recently sought to protect their commercial value.”

In the future, sponsorship of individual athletes may well conflict with team sponsorship, the authors envisage. They, therefore, suggest that when sponsoring a team, companies should ensure that their agreement restricts individual athletes from entering into conflicting agreements with the sponsors’ competitors.

Domain name

A forgotten right to which the book draws attention is ‘domain name.’ Register all appropriate domain names as soon as possible once sponsorship has been agreed, urge Ordish and Adcock. “Domain names are quick and easy to register, and so can often fall prey to cyber squatters who get in first.”

Pay attention also to the naming of the event, by getting approval both at the geography (from the relevant local AIC, ‘Administration for Industry and Commerce’) and the sporting authority levels.

Don’t be surprised if, despite your paying for the event name, the Chinese broadcasters cut off the sponsor’s name in the commentary, programming and so on. Many Chinese broadcasters don’t support the commercialising of sporting events, the authors explain. “This can be managed partly through the contract, but will also require education of the broadcasters involved.”

Ambush marketing

Last, but quite frighteningly for the advertisers, there is the risk of ambush marketing, “where competitors of official sponsors associate their brand with the event without authorisation.” In China, for example, Coca-Cola faced ambush during its sponsorship of the first Formula 1 race in Shanghai by Pepsi, the authors narrate.

“Coca-Cola was the official sponsor within the racetrack grounds. However, a Kentucky Fried Chicken outlet just across the boundary sold Pepsi, and a lot of the competing cola made it over the fence into the grounds.” The next year, the sponsor was smarter; the sponsorship agreement specified, a five-kilometre radius from the venue!

Ambush marketing creates an increased risk particularly by Chinese companies that use their relationships with authorities to target foreign brand owners’ sponsorship of events, the authors warn.

Thankfully, however, the BOCOG (Beijing Organising Committee for the Games of the XXIX Olympiad), is eager to leave an IP legacy from the games in which China is stronger in its intellectual property awareness, protection, and enforcement, find Ms Ordish and Mr Adcock.

The Committee has accordingly required all athletes to agree only to promote official Olympic sponsors’ products. “They have also contractually prohibited manufacturers of Olympic uniforms from using their association with the Olympics for promotional purposes.”

Prescribed read for those who play the IP game.

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