Opinion
Why Do Properties’ Cause Overlays Leave Sponsors On The Sidelines?
6/28/10: A trend I have noticed lately involves rightsholders—primarily sports and entertainment properties—conducting cause-related promotions that bring attention to their events and organizations while benefiting a charitable group. Many of these have taken the form of online auctions for a property-related VIP experience, with the proceeds donated to charity.
Such programs deliver wins to the property, cause and consumers, but what about the property’s sponsors? Wouldn’t the rightsholders be better served by offering this platform as an “ownable” proprietary program that is part of an added-value sponsorship package? The property would 1) still reap the positive publicity from the cause tie, 2) receive additional marketing support for the program from the sponsor, and 3) add a valuable benefit that could be the difference in attracting or retaining sponsors.
My Legal/Ambush Question Answered
I tracked down the world’s foremost expert on sponsorship law—attorney Mary Hutchings Reed, who is of counsel to the Chicago-based firm Winston & Strawn and author of
The IEG Legal Guide to Sponsorship—to get her opinion of the
GU Energy Labs announcement I wrote about recently.
The two questions I put to Mary were: Was GU within its rights to issue a press release noting that the Brazilian national soccer team had purchased its product? And are there steps a property can take to restrict a vendor from announcing that the rightsholder has become a customer?
The answer to the first question: GU’s announcement does not violate any Team Brazil commercial rights. Specifically, Reed said:
“It’s basic trademark law that one is free to use another’s trademark in a truthful manner, for the limited purpose of making a truth statement about that product or your own. You can, for instance, say you service Volkswagens, even if you aren’t an ‘authorized’ dealer. But you can’t use their logo and you can’t suggest an endorsement, sponsorship or affiliation if none exists.”
She further pointed out that while a company such as GU is within its rights to publicize and advertise the names of teams, companies, etc. who are customers, they need to be careful in their language. “Can you say, ‘here are the companies who trust us?’ since you don’t know why they bought your product? You might not even know that they ‘use’ your product; perhaps it is just back-up, so you’ll always have to pay close attention to the actual facts.”
As to whether properties can limit such disclosures by companies whose products they buy, Reed added:
“If a team is buying direct from the manufacturer, then the team should be able to write a confidentiality clause or a PR clause that says the company won’t disclose the purchase without the team’s consent. (And, on the third side of this, if you are an official supplier or official sponsor, you ought to write a clause that says the team won’t buy from competitors or other specified vendors, to forestall just this sort of thing.)
“But if a team buys from a third-party vendor, and it’s true that the team has bought a product, then the law in the U.S. does seem to allow some latitude for the use of the team’s word trademark to truthfully advertise that. (Note, however, that the law does not grant the same latitude to a company when a celebrity buys or uses its product; the commercial use of a person’s name/right of publicity almost always must be licensed, and almost any use by a commercial entity is a commercial use.)”