Ambush Marketing and the FIFA 2010 World Cup

The Fédération Internationale de Football Association (Fifa) 2010 World Cup, which kicks off on 11 June 2010 will be one of the largest and most widely followed international sporting events in history. The matches, which comprise the tournament, lasting for a period of a month, will be attended by multitudes of spectators and the television broadcast of those matches will be viewed by hundreds of million viewers all around the world. There will thus be a concentrated international focus on the event and all that goes with it, including, not in the least, the advertising and promotion of products and services, which accompanies it, and more particularly those of the official sponsors and licensees.

Sponsorships

The tournament, like similar tournaments that have gone before, will be financed to a substantial extent by sponsorships. Staging an event like a soccer World Cup tournament is an enormously expensive enterprise and the organisers of the event are beholden on sponsorship monies to a very significant extent in order to make the event happen. Because of the worldwide attention focused on the tournament, it provides a very effective advertising and promotional vehicle. The opportunity of using the event as an advertising and marketing platform, and reaching billions of people around the world, is what motivates sponsors to pay the considerable sums of money involved in a sponsorship.

The basic principle that applies to the sponsorship of an event such as the soccer World Cup is that the sponsor pays the sponsorship fee and in return is granted exclusive rights by the event organiser to use the event as a promotional and marketing platform in its particular field of interest or trade. For instance, McDonald’s is the fast food sponsor of the Fifa 2010 World Cup and the quid pro quo of paying the sponsorship money is that Fifa grants to McDonald’s the exclusive right to utilise the soccer World Cup in its advertising and promotional campaign in the fast food field. It follows from the fact that many major global brands are prepared to enter into sponsorship arrangements of this nature that the sponsor must regard the deal as a worthwhile one, provided, however, it has exclusivity in its field. If, however, that exclusivity is impinged on or watered down, then the sponsor may well feel that it has not derived its money’s worth out of its sponsorship and, apart from the other remedies that may be available to it, it may decline to sponsor future events of a similar nature.

In the premises, it is very important for an event organiser, such as Fifa, to deliver on its promise of exclusivity to its sponsors. Not only is there strong onus on the event organiser to meet its obligations in this regard, but the continued viability of future events of a similar nature may hinge on it.

Ambush marketing

It is a fact of modern commercial life that predatory trading enterprises, and in particular the competitors of the sponsors of the event, seek to gain benefit from, or utilise, the event in order to promote their products, without being a sponsor. The public attention focused on an event such as a soccer World Cup is such, that it creates a golden opportunity for commercial traders to utilise interest in the event in order to promote their products and their business. In short, history has shown that there are many non-sponsors of events who in effect seek to derive the benefits of a sponsorship of an event without incurring the financial outlay that a sponsorship entails. Predatory advertising and marketing of this nature has become known as ‘ambush marketing’. Preventing or stopping ambush marketing in order to preserve its and its sponsors’ interests has become a major preoccupation of event organisers such as Fifa.

In a previous article published in the 2000 (June) DR 24 under the title ‘Ambush marketing’ I defined ambush marketing as follows:

‘Ambush marketing takes place when a trader seeks to utilise the publicity value of an event, for instance a major sports tournament or concert, to gain a benefit from it despite not having an involvement or connection with that event and more particularly having made no financial contribution to entitle him to derive benefit from it.’

Such has become the importance of ambush marketing in the context of major international sporting events that before an event organiser allocates a major event of this nature to a country it will satisfy itself that the laws of the country in question have adequate provisions for combating ambush marketing. Furthermore, that organiser is likely to seek assurances from the host country that its laws will enable the event organiser to prevent ambush marketing and that the host country will commit itself to doing all within its power to enable the event organiser to counteract ambush marketing. In the case in point with the Fifa 2010 World Cup, assurances of this nature were sought by Fifa and were given by the South African government. This factor contributed to the 2010 event being awarded to South Africa.

Adequate Protection

It is probably true to say, looking ahead, that no country is ever likely to be awarded a major international sporting tournament, such as the soccer World Cup or the Olympic Games, without it being in a position to give assurances of such a nature to the event organiser. This has been borne out by the fact that in the case of the 2007 Cricket World Cup in the West Indies, the 2011 Rugby World Cup in New Zealand and the 2012 Olympic Games in the United Kingdom, all these states have enacted special legislation dealing with ambush marketing.

It follows that from a country’s point of view, there is considerable merit and benefit to be gained from putting in place effective laws to deal with ambush marketing. The fact that such laws exist in a potential host country for a major international sporting event is a strong positive factor making that country an attractive candidate for the staging of such an event. South Africa’s customised ambush marketing legislation, which will be described below, was put in place prior to the 2003 Cricket World Cup and no doubt contributed to that tournament being awarded to the country, and it was an important selling point supporting South Africa’s bid to host the 2010 World Cup soccer. Having laws of this nature puts South Africa in a position to be a serious contender for future events such as rugby and cricket world cups, as well as the Olympic Games.

Forms of ambush marketing

As discussed in my article entitled ‘Ambush marketing and protected events’ published in the 2003 (Nov) DR 20, ambush marketing can take two forms, namely ‘association’ and ‘intrusion’. For ease of reference I quote my definitions of these two forms of ambush marketing that were given in my article.

Ambush marketing by association was described thus:

‘In this form of ambush marketing, the ambush marketer misleads the public into thinking that he is an authorised sponsor or contributor associated with the event.’

By contrast, ambush marketing by intrusion was given this explanation: ‘The ambush marketer seeks not to suggest a connection with the event but rather to give his own name, trade mark, or other insignia exposure through the medium of the publicity attracted by the event; this is done without any authorisation of the event organiser’.

These two forms of ambush marketing differ significantly from each other and have separate elements or criteria. It can, however, happen that the elements of both forms of ambush marketing can occur in the same advertisement or objectionable form of marketing. It is important not to confuse the elements that make up association with those that make up intrusion, and vice versa. There have been situations where a claim of ambush marketing by intrusion has been defended or criticised on the basis that the elements of ambush marketing by association have not been present.

Ambush marketing by association

In very broad terms, ambush marketing by association amounts effectively to passing-off goods or services being advertised or promoted as being connected in the course of trade with a major event and/or its organiser. The ambush marketer misrepresents that he is a sponsor or licensee in respect of the event.

Using the example of Fifa and the 2010 World Cup soccer, Fifa, as the event organiser, has the following weapons or causes of action at its disposal for combating ambush marketing by association:

  • Registered trade marks – Fifa has registered a very extensive portfolio of trade marks under the Trade Marks Act 194 of 1993. These include marks such as Fifa World Cup, South Africa 2010, Soccer World Cup, World Cup 2010 and the official emblem of the 2010 Fifa World Cup, to mention but a few. Use of any of these trade marks without Fifa’s authority, or marks that are confusingly similar to them, may constitute trade mark infringement in terms of s 34 of the Trade Marks Act.
  • Registered designs – Fifa has registered the official emblem, the appearance of the official mascot, Zakumi, and other designs as designs under the Designs Act 195 of 1993. The unauthorised manufacture and/or sale of products bearing these designs, or designs not substantially different from them, will constitute infringement of Fifa’s registered designs.
  • Copyright – the official logo constitutes an artistic work in terms of the Copyright Act 98 of 1978 and it meets the requirements for subsistence of copyright in it in South Africa. Such copyright is owned by Fifa. In general, any works eligible for copyright made by or on behalf of Fifa for the 2010 World Cup soccer, including the appearance of the mascot Zakumi, enjoy copyright in South Africa. The making of unauthorised reproductions and adaptations of these works, or of any substantial part of any of them, and distributing any such goods in the knowledge that they are infringing copies of Fifa’s works, constitutes copyright infringement under the Copyright Act.
  • Passing-off – the common law provides the remedy of passing-off in terms of which no trader may by the use of marks, signs or other forms of representation, suggest, or mislead consumers into believing, that there is some form of trade connection between such manufacturers’ goods and the 2010 World Cup soccer and/or Fifa.
  • Trade Practices Act – s 9(d) of the Trade Practices Act 76 of 1976 reads as follows: ‘No person shall – in connection with a sponsored event, make, publish or display any false or misleading statement, communication or advertisement which represents, implies or suggests a contractual or other connection or association between that person and the event, or the person sponsoring the event, or cause such statement, communication or advertisement to be made, published or displayed.’

This offence essentially amounts to a statutory form of passing-off in the case of a sponsored event and the section provides for a criminal offence. The matter does not, however, end there. Fifa has in several instances advanced the argument, relying on the principle in Patz v Green and Co 1907 TS 427, that a competitor who commits an objectively unlawful act (ie, commits an offence in terms of s 9(d) of the Trade Practices Act) in a competitive environment with it, namely in connection with the World Cup soccer, causes, or is likely to cause, it damage and is therefore competing unlawfully with it under the common law. This line of argument in connection with an offence under the Merchandise Marks Act 17 of 1941 was approved by the then Appellate Division of the Supreme Court in Berman Brothers (Pty) Ltd v Sodastream Ltd and Another 1986 (3) SA 209 (A).

  • Merchandise Marks Act – s 15 of the Merchandise Marks Act, empowers the Minister of Trade and Industry to prohibit, either absolutely or conditionally, the use of any mark in connection with any trade, business, profession, occupation, or event, or in connection with a trade mark, mark or trade description applied to goods. This section has, in the past, been utilised by the minister to prohibit use of marks such as the Olympic rings symbol without the authority of the International Olympic Committee. Various marks connected with the 2006 Fifa World Cup soccer held in Germany, were also protected. Fifa sought protection in terms of this section in respect of the 2010 Fifa World Cup but, regrettably, the notice published by the minister in GN683 GG28877/25-5-2006 purporting to grant this request is so badly drafted, vague and convoluted that it has been of no assistance and has not been relied on by Fifa or any law enforcement authority such as the South African Police Services, the National Prosecuting Authority, etc. For all practical purposes it has been regarded as pro non scripto.
  • Advertising Standards Authority (ASA) – the ASA has promulgated a Sponsorship Code, article 11 of which corresponds broadly to s 9(d) of the Trade Practices Act. Accordingly, recourse can be had in appropriate circumstances to the mechanisms provided by the ASA to enforce its code.

Ambush marketing by intrusion

Protection against ambush marketing by intrusion is provided for in s 15A of the Merchandise Marks Act. In terms of this section, the Minister of Trade and Industry can designate an event as a ‘protected event’. In the case of the Fifa 2010 World Cup this took place in GG28877/25-5-2006. This status of the Fifa 2010 World Cup commenced on the date of publication of the notice and will endure until a period ending six months after the completion of the tournament. During that period no person may use a trade mark (including his own trade mark) in relation to such event in a manner that is calculated to achieve publicity for that trade mark and thereby to derive special promotional benefit from the event. The use of the trade mark in question may not in any way, directly or indirectly, be intended to be brought into association with or allude to the event. The provision creates a criminal offence. In effect, this provision creates an unlawful act that amounts to abusing one’s own trade mark rights. The user of the trade mark is prevented from using that mark in a manner that impinges unduly on the promotional value of the soccer World Cup. Its rationale is clearly to provide a means of enabling the event organiser to safeguard the rights of sponsors flowing from their sponsorship of the event.

The following are the elements of the unlawful act of ambush marketing by intrusion, as derived from s 15A of the Merchandise Marks Act:

  • The ambusher must use a trade mark, which could even be his own registered trade mark, in relation to his product or services.
  • The manner of use of that trade mark must be such that it must achieve publicity for it.
  • The manner of use of the trade mark in question must be brought into relation with, or allude to, the event, namely, the 2010 Fifa World Cup.
  • The user of the trade mark must derive special promotional benefit from alluding to the event.
  • The user must intend all of the above by use of the trade mark in question.

It must be emphasised that nowhere in the aforegoing elements of the ambush marketing by intrusion is it suggested that the objectionable trade mark use must create any form of confusion that there is any connection in the course of trade between the user of the mark and Fifa or the soccer World Cup. As stated above, the essence of intrusion is the focusing of the limelight attracted by the World Cup soccer on one’s own trade mark; in point of fact, abusing one’s own trade mark right in the particular circumstances. The requirement that the use complained of should create confusion is an element of ambush marketing by association, but not by intrusion.

As in the case of an offence against s 9(d) of the Trade Practices Act, discussed above, an offence under s 15A of the Merchandise Marks Act can also give rise to a civil claim by Fifa of unlawful competition against the transgressor.

Instances of ambush marketing

Fifa has to date launched three ambush marketing cases in the High Court of South Africa in which civil law causes of action have been pursued. Two of these cases have given rise to judgments in Fifa’s favour, and the third one Federation Internationale de Football Association (FIFA) v Executive African Trading CC and the Registar of Designs (GNP) (unreported case no 52308/07, 9-11-2007) is currently pending at the time of writing this article, although a judgment has already been entered in Fifa’s favour on an interlocutory issue.

The first case was Federation Internationale de Football Association (FIFA) v Eastwood Tavern (GNP) (unreported case no 52309/07, 12-15-2009) (Van der Merwe J) in the Northern Gauteng High Court in the matter in which Fifa objected to the prominent use by the respondent of the trade mark World Cup 2010 on the fascias of its restaurant, in conjunction with the trade mark Eastwood, and accompanied by the use of the flags of the countries qualifying for the 2010 tournament. Fifa claimed infringement of the registered trade mark World Cup 2010, passing-off, and unlawful competition based on contraventions of the Trade Practices Act and s 15A of the Merchandise Marks Act. After initially contesting the case, the respondent consented to a judgment against it and submitted to an interdict as sought.

Eastwood Tavern

The second case was Internationale de Football Association (FIFA) v Metcash Trading Africa (Pty) Ltd (GNP) (unreported case no 53304/07,1-10-2009) (Msimeki J) in the same Division of the High Court. In this case, the respondent produced a lollipop having a wrapper which featured its trade mark Astor together with imagery depicting a soccer ball and the date 2010, with the zeros of the date taking the form of soccer balls (a mark used and registered by Fifa). Fifa claimed trade mark infringement, passing-off and unlawful competition based on the contravention of s 15A of the Merchandise Marks Act and s 9(d) of the Trade Practices Act. In this case the court handed down a written judgment that upheld Fifa’s claims unequivocally, and in particular, upheld Fifa’s unlawful competition cause of action based on the transgression by the respondent of the criminal provisions of s 15A of the Merchandise Marks Act. This case marks the first instance of the court pronouncing on the interpretation of s 15A of the Merchandise Marks Act and has set an important precedent.

Metcash Trading Africa’s lollipop

Recently, Fifa objected to the Kulula.com airline using an advertisement, which while not specifically referring to the 2010 Fifa World Cup in terms that, in Fifa’s view, alluded to the event and otherwise comprised all the elements of ambush marketing by intrusion. No claim of ambush marketing by association was made by Fifa. A letter of demand requiring Kulula to discontinue using the contentious advertisement was dispatched to Kulula. The letter claimed that the advertisement alluded to the World Cup by virtue of it exhibiting features such as soccer balls, vuvuzellas, the date 2010 and various other signs, the totality of which called to mind the event. As reported in the media, Kulula immediately complied with Fifa’s demands and discontinued the use of the contentious advertisement. It subsequently brought out a revised advertisement to which Fifa did not object. Fifa’s claim in this regard, and Kulula’s reaction to it was well publicised in the media and the result caused a measure of controversy and some criticism of Fifa. The soundness of this criticism must be questioned because, by its reaction to Fifa’s demand, Kulula in effect arguably conceded the validity of Fifa’s claims. In particular, criticism on the outcome on the basis that Kulula’s advertisement was not likely to cause any confusion to the effect that Kulula may be connected in the course of trade with the event, or Fifa, was misplaced. As adverted to above, confusion of this nature is not an element of ambush marketing by intrusion, and the absence of the likelihood of confusion is thus not a valid defence.

Kulula.com airline original advert

Kulula.com airline revised advert

Conclusion

With a short period remaining before the commencement of the 2010 Fifa World Cup, there have been comparatively few instances of ambush marketing of the 2010 Fifa World Cup, in comparison with what happened in respect of the 2006 Fifa World Cup held in Germany and previous soccer World Cups. While there may be several reasons for this, it is possible that the availability in South African law of strong measures to counteract ambush marketing, and the deterrent effect that this poses, has played a significant role in this regard. If this supposition is correct, by adopting effective anti-ambush marketing measures, South African lawmakers will have made a significant contribution to the success of the 2010 Fifa World Cup in South Africa and to advancing South Africa as an appropriate and choice venue for staging major international sporting and other events of this nature in the future.

The article was first published in the June 2010 issue of De Rebus, the South African Attorneys’ Journal.

Owen Dean BA LLD (Stell) is an attorney at Spoor & Fisher of Cape Town and Centurion.

Date published: 2010/06/29
Author: Dr Owen Dean

Tags: ambush marketing fifa 2010 world cup