Pharmaceutical Trade Names: Sponsorship on TV - Ukraine


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TV commercials are the best way to promote mass-consumption products, including pharmaceutical products. The main advantage of TV commercials is their broad coverage, as television is considered to be the most widespread mass media. At the same time, TV commercials provide ample opportunities for targeting.

Sponsorship and other types of TV commercials

TV commercials are the best way to promote mass-consumption products, including pharmaceutical products. The main advantage of TV commercials is their broad coverage, as television is considered to be the most widespread mass media. At the same time, TV commercials provide ample opportunities for targeting. It allows reaching the intended target audience more accurately, selecting it on the basis of interests by means of advertising in topical shows or advertising at a specific time, consequently, improving the efficiency of such advertising.

However, in comparison with the other media, TV commercials are considered to be the most expensive way of promotion. This necessitates the use of the most balanced approach as blunders in such advertising campaigns will cost a lot as well.

Tentatively, TV commercials may be divided into three types:

* Direct advertising;
* Sponsorship;
* Product placement.

Direct advertising is the most widespread type of advertising on TV. It means placing a video commercial in a specially specified advertising block.

Less common but at the same time widely used type of advertising on TV is sponsorship. Sponsorship implies integration of such advertising in any kind of TV show.

Another type of advertising on TV is so-called product placement. This type of advertising is not learned well and it is not known much about its efficiency and pricing. The essence of this type of advertising is placing advertisements directly in movies.

It is worth mentioning that so-called index of viewers’ attention during the advertising blocks is significantly decreasing due to viewers’ behavior during advertising breaks. For instance, some viewers change the channels during an advertisement, others do not stay in front of TV due to some household needs and so on. All this decreases efficiency of direct advertising. At the same time, sponsorship has the highest efficiency comparing to direct advertising as a result of less irritation for viewers. The index of viewers’ attention during the show is significantly higher comparing to the index of viewers’ attention during the advertising block and the viewers’ credibility towards adverting increases due to attitude to the show. The type of advertising in a sponsored show may assume very different forms, in particular, it may be: a logo in the corner of the screen, a short sponsored break bumper, prizes for participants, clothing of anchors and etc. Another attractive aspect of sponsorship is that the cost of such advertising is usually lower than the cost of direct advertising. However, some times the cost of full sponsorship package with well-thought and creative integration of advertising into a show may turn out to be higher than placement of direct advertising during advertising blocks in the same show.

Sponsorship Concept and Benefits

The legislation of Ukraine (Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР article 1, paragraph 19) defines sponsorship as voluntary material, financial, organizational and other support by individuals and legal entities of any activity for the purpose of popularization exclusively of its own name, title and trade mark. This circumstance puts “indirect advertising character” toward sponsorship. Advertising a trade mark for goods and services, the sponsor basically advertises products that are marketed under this mark. This circumstance is well accepted by the pharmaceutical market where each pharmaceutical product is a separate trade mark.

“Indirect advertising character” of sponsorship even more emphasized by the paragraph 1of the article 5 of Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР. In accordance with this article, it is prohibited to use any information of advertising character about the sponsor and/or his products, except for his name, title and trade mark for goods and services, on TV, radio shows, the materials in other mass media, entertainment and other events that are created and being conducted under participation of sponsors.

Since a name of a pharmaceutical company (probably except for some rare cases) does not carry any information to a common consumer targeted by the advertisement, all sponsorship type advertising aired on TV - is demonstration of trade marks for goods and services. On the one hand, this creates additional difficulties (which will be discussed further), on the other hand - it creates opportunities for mass promotion of products, direct advertising of which is limited by the Ukrainian legislation. The latter may serve as a significant advantage in favor of sponsorship in the light of the latest tendencies aimed at prohibition of pharmaceutical products advertising.

In accordance with the paragraph 4 of article 5 of Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР a show, a broadcast that are prepared due to support of a sponsor, shall be identified by means of subtitles or broadcaster’s text at the beginning and/or at the end of the show, the broadcast. Having said so, cogent advantage of sponsor advertising on TV is that the limitations related to advertising on TV established by the article 13 of Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР, in particular, regarding the share of advertisement in an actual volume of broadcasting during one same hour and also related to limitations of advertising messages during the shows and movies broadcasting, are not applied to such advertising. In this sense, indication of the sponsor’s name and/or his trade marks are not considered to be advertising (Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР, article 13, paragraph 6).

Sponsorship Related Issues

The questionable aspects of the sponsor advertising are usually related to the advertisement content. Advertising of only a trade mark for goods and services under which the pharmaceutical product is marketed, as a rule, is not efficient as it does not tell a consumer much about the features and designation of the advertised pharmaceutical product. In this respect, usually the need is to extend the message, contained in the sponsor advertisement, which is impossible without additional registration of the trade marks for goods and services containing such message.

Therefore, the advertisement message, aimed to communicate to the consumer key information about the advertised products should be rather concise and submitted in a form of a slogan that will be consequently registered as a trade mark for goods and services.

At the same time it is necessary to take into consideration the limitations related to registration of trade marks that are established by the Ukrainian legislation. According to the paragraph 1, article 6 of Goods and Service Trademarks Rights Protection Act of Ukraine of 15December 1993 № 3689-XII the following signs are not subjected to legal protection but may be included into the content of the trade mark for the goods and services provided it is approved by the authorized State body:

* National symbols, flags and other state symbols (emblems);
* Emblems, full or abbreviated names of international intergovernmental organizations;
* Official countersigns, seals of guarantee, hall marks, seals;
* Awards and other signs of honor.

Generally (according to the paragraph 2 of the article 6 of Goods and Service Trademarks Rights Protection Act of Ukraine of 15December 1993 № 3689-XII), legal protection is not extended upon the signs that:

* Does not have a distinctive power and have not acquired such power as a result of their use;
* Comprised of images, that are widely used to specify particular kind of goods or services;
* Comprised of descriptive symbols/terms with relation to the products or services submitted in application note, in particular: specify the appearance, quality, contents, quantity, qualities, indications, values of the goods or services, time and place of production and sales;
* Colorable or such that may mislead a consumer with regard to the entity, service or product;
* Comprised of the symbols or words used in broad circulation;
* Reflects unique shape, conditioned to the natural state of the product or the necessity to obtain technical result, or such that gives substantial value to the product.

It is important to note, that registration of trade marks for goods and services for a specific sponsor campaign, as a rule, introduces a certain risk element to such event. Life cycle of the advertising campaign, beginning from the idea approval to the airing of the commercial, on average, takes about from 3 to 4 months (in some cases – 6 months; rarely – up to1 year). At the same time, registration of trade marks for goods and services in Ukraine takes on average from 6 months to 1 year. In this connection, registration of a set of trade marks for goods and services, necessary for sponsorship on time for the beginning of the sponsorship campaign is often impossible. Even under condition that the shortest possible term for registration of trade marks for goods and services is 2 months, this time is usually not available because finalized version of the sponsor advertisement is produced only after confirmation of the final draft by the TV channel, which happens practically right before the campaign launch.

However, the market has found its way out of this situation. Television channels place the sponsor advertisement, containing the trade marks for goods and services that are currently in the process of registration, after all necessary application documents are filed. Legal basis for such approach used by TV channels can be found in the article 16 of Goods and Service Trademarks Rights Protection Act of Ukraine of 15December 1993 № 3689-XII, according to which the rights stated in the certificate on the trade marks are valid beginning the date of application.

The probability of inspection of a specific sponsorship by the controlling authority right after it is aired is negligible. Usually by the time of possible inspection the trade marks will be registered and their validity term will also cover the period of sponsorship (after submission of the application, but before the date when the certificate was obtained).

It is worth noting, that currently in Ukraine we had no single occasion of sponsorship legitimacy inspection by the controlling agencies. However, this fact should not be taken as a reason for refusal of a sponsor company to complete the registration procedure for the trade marks for goods or services used in advertising campaign and actual certificate receipt for such trade marks.

Another problem that may be faced while preparing sponsor advertisement on TV is the fact that in majority of cases sponsor advertisement is not limited to a static picture of a sponsor’s trade mark for goods and services. Usually, this is a rather short (from 5 to 10 seconds) but a complete video clip, reflecting a certain dynamics related to the trade mark, in particular, its appearance on the screen, transformation, etc. At the same time, according to the paragraph 2 of the article 5 of Goods and Service Trademarks Rights Protection Act of Ukraine of 15December 1993 № 3689-XII an object of the trade mark for goods and services may serve any symbol or combination of symbols. Such symbols, in particular, may be words, including the proper names, letters, digits, visual elements, colors and color combinations, as well as any combination of such symbols. On this basis the video commercial itself may not be registered as a trade mark for goods and services, however, its separate (key) still frames may be registered. All this leads us to a question: how justifiable is the dynamic transition between such trade marks for goods and services in order for the whole video commercial to look as a complete video clip? In the light of lack of clear legal regulation and relevant court practice and the practice of the authorized bodies in this area, this issue remains unresolved.

It will be fair to say, that the main risk connected to categorizing a sponsor video clip as direct advertising, to the largest extent is carried by the TV channel, because violation of legal requirements regulating the airing of the advertisement may serve as a basis for license forfeiture. However, in case of the sponsor advertising of pharmaceutical products, the ordering client may also be held liable on the basis of the chapter 4 paragraph 1of the article 27 of Advertisement Act of Ukraine of 03 July 1996 № 270/96-ВР, as a result of violation of legal requirements regarding the content of the advertisement, due to the fact, that sponsor advertisement does not contain the mandatory elements, necessary for pharmaceutical products advertising, in particular:

* Presence of clear statement that the advertised product is a pharmaceutical product;
* Requirement to consult with a doctor prior to use of a pharmaceutical product;
* Recommendation regarding familiarizing oneself with the prescribing information for a pharmaceutical product.

These components do not comply with sponsor advertising because they contradict it in essence.

Perspectives of Pharmaceutical Brands Sponsorship Development

Regardless of some risks related to placement of the sponsor advertising with regard to pharmaceutical marks for goods and services, this type of advertising will retain its relevance in the future, and most likely shall obtain wider circulation. First of all, this is connected with the growing tendency of prohibition of direct advertising of pharmaceutical products. In case when such prohibition of “direct advertising” of pharmaceutical products finds its legislative support, most likely, the following development scenario will be similar to the one used by the owners of alcohol trade marks for goods and services. Especially, as the mentioned risks may be effectively minimized by using a balanced approach to form the contents of the sponsor video advertisement.

ABOUT THE AUTHOR: Andriy O. Gorbatenko, Counsel
Legal Alliance’s lawyers are widely experienced. The firm has successfully demonstrated its skills since its establishment in 1995, earning an excellent reputation among its clients and recognition by its colleagues. Since 2004, according the annual All-Ukrainian analytic research “50 leading law firms of Ukraine”, compiled by the newspaper Law practice, Legal Alliance has continuously been named among top twenty-five firms in Ukraine.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.



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