Intellectual property law and how it applies to sport events

Major sports are big business and vast sums of money are involved in staging sport events. This global trend was brought into sharp focus in South Africa during the 2010 FIFA World Cup, which provided an excellent example of the role that branding plays in major sports, both generally and more especially in South Africa. Copyright expert at Spoor & Fisher, DR OWEN DEAN, explains how best the law can be applied to benefit everyone involved.

A long established organisation, the Federation Internationale de Football Association (FIFA) has developed a very clear policy for protection of brands relating to the tournament. This has come to the fore more and more in recent years, especially during the 2010 FIFA World Cup.

FIFA adopts and protects several different categories of brands in connection with the World Cup. There are various generic brands which apply to its activities in general and to every World Cup, such as the mark FIFA, and the representation of the World Cup trophy. There are also brands which denote the particular tournament itself, such as GERMANY 2006 and SOUTH AFRICA 2010. Then there are event specific brands such as the official emblem for each World Cup, the official mascot for the tournament, and the name of that mascot. In the case of South Africa 2010, the official mascot was ZAKUMI.

Trademark registration

At the forefront of FIFA’s programme to protect its brands is the registration of trade marks. Generic trade marks, such as the mark FIFA, have been registered in South Africa for many years in respect of a wide range of goods and services and consequently no special steps were necessary to prepare for the staging of the 2010 tournament.

FIFA registered the trade marks SOUTH AFRICA 2010 and WORLD CUP 2010 in a wide range of classes. For the event’s specific marks, FIFA registered the official logo, the so-called FOOTBALL PLAYER & DEVICE mark, the word ZAKUMI and the MASCOT DEVICE mark in an extensive range of classes. The official logo was the principal event-specific mark and required the most comprehensive protection possible. In addition to registration as a trade mark, the official logo was also registered as a design under the Designs Act in several classes.

For the 2006 FIFA WORLD CUP in Germany, FIFA also registered, or sought to register, various trade marks designating the event. Registration of all of the marks was sought for an extensive range of goods and services. Some marks were refused by the German Federal Supreme Court on the basis that they were basically descriptive of the event itself and therefore non-distinctive.

The South African experience

In South Africa, interestingly, the corresponding marks, such as SOUTH AFRICA 2010 and WORLD CUP 2010, were allowed to proceed to registration by the Registrar of Trade Marks without any objection from any third party, notwithstanding the decisions which had been reached by the European tribunals. South African trade mark law and the European laws are very similar on the question of the non-registrability of descriptive marks and it would have made sense that the South African marks would have suffered the same fate, or at least that they would have been the subject of objections. European counterparts. As it happens, the 2010 FIFA World Cup came and went without a single challenge to these marks, despite the fact that they were relied upon for purposes of the enforcement of FIFA’s rights in their marks.

The Merchandise Marks Act, 1941, contains a provision, in Section 15, which allows for the Minister of Trade and Industries to prohibit the use of certain marks. FIFA relied on this provision and made application to the Minister of Trade and Industry for the prohibition of a wide range of World Cup marks. The minister duly issued a notice prohibiting certain of the marks for which protection had been sought, but the protection was made subject to such convoluted and stringent conditions that no efforts were made to enforce any rights under that notice. The minister’s attitude in this regard was strange since on previous occasions marks such as the OLYMPIC SYMBOL and designations of other sports events have been granted protection virtually unconditionally. It is possible that the minister thought FIFA was overreaching itself in the degree of comprehensiveness of the protection that it was seeking for its marks, particularly given the wide range of trade mark registrations which had simultaneously been sought.

Passing-off

The common law remedy of passing-off also provided FIFA with a vehicle for protecting its marks. The enormous publicity attached to the staging of the 2010 World Cup undoubtedly established a strong and significant repute in FIFA’s various trade marks connected with the event. This repute, and the goodwill flowing from it, provided an ample platform for FIFA on which to make passing-off claims where other parties used marks wrongly, suggesting an association between goods/services to which they were applied and the tournament, without FIFA’s authority. A finding that such a repute had been established was made in the case Federation Internationale de Football Association (FIFA) v Metcash Trading Africa.

FIFA’s ability to rely on passing-off was considerably fortified by an earlier case that it had brought in South Africa in 1994 during the time of the FIFA World Cup held in the USA. In that case, FIFA had successfully claimed passing-off against a clothing manufacturer which had marketed clothing bearing the trade mark “WORLD CUP” at the time of the staging of the event in the USA. Even at that time, FIFA was able to satisfy the court that the term WORLD CUP denoted a trade connection with itself. This case was of great significance at the time because in an earlier case the court had held, in dealing with the phenomenon of so-called “character merchandising”, that there was no reason to suppose that the public would associate, for instance, a restaurant trading under the mark DALLAS with a television series having the same name. The court thus refused to accept that the practice of “character merchandising” was established in South Africa. FIFA was able to overcome the court’s unwillingness to recognise this phenomenon and to satisfy the court that the use of the trade mark WORLD CUP in the given circumstances was likely to cause the product in question to be presumed to have a trade connection with FIFA and the football tournament.

The Trade Practices Act contains a provision which, in the context of major sports events such as the FIFA World Cup, effectively amounts to a statutory form of passing-off that is subject to criminal sanction. FIFA also relied on this provision to protect its trade marks connected with the 2010 FIFA World Cup. Although it and Section 15 of the Merchandise Marks Act are criminal provisions creating no civil law remedies, FIFA successfully used an unlawful competition argument to create a civil law cause of action arising out of the criminal statutes. The cause of action is based on the principle that when a party commits a criminal offence, it objectively acts unlawfully and, if that unlawful conduct causes damage to another party, that party has a claim in delict based on unlawful competition.

Ambush marketing

FIFA and other organisations owning event marks could also derive assistance in protecting their marks from the quarter of the Advertising Standards Association (ASA), a voluntary body constituted by the advertising industry. It has an Advertising Code of Conduct and, as an adjunct to it, a “Sponsorship Code”, which reads as follows: Ambush Marketing is the attempt of an organisation, product or brand to create the impression of being an official sponsor of an event or activity by affiliating itself with that event or activity without having paid the sponsorship rights-fee or being a party to the sponsorship contract.

The provisions of paragraph 3.7 of the Sponsorship Code are essentially similar to Section 9(d) of the Trade Practices Act and amount in reality to a codified form of passing-off relating particularly to major sports events. Breaches of these ASA Codes are enforced by various committees constituted by the ASA and a recalcitrant transgressor of the Sponsorship Code can be faced with an embargo on all its advertising imposed by the members of the ASA, which includes all the media and the printing industry. Such an embargo can have a far-reaching effect and penalty for a recalcitrant advertiser.

Artistic works

Finally, the official logo of the 2010 FIFA World Cup, as well as the appearance of the official mascot, constitute “artistic works” for purposes of the Copyright Act. Unauthorised reproduction or adaptation of these works can constitute copyright infringement, which is a useful form of protection in the context of a major event. The same considerations apply, of course, to any mark which constitutes a literary or an artistic work for purposes of copyright law. Copyright infringement in respect of the official logo was in fact relied upon by FIFA in the build up to, and during, the 2010 FIFA World Cup, particularly at a time prior to the corresponding trade mark being registered. FIFA thus had, and used, a strong armoury of IP weapons at its disposal to protect and capitalise commercially on its branding during the 2010 FIFA World Cup. The commercialisation of the brands connected with the tournament contributed substantially to the tournament being enormously successful in all respects, and particularly from a financial point of view.

Proper utilisation of the law

It’s apparent that South African law grants effective protection for sports brands, provided it is properly utilised, as was the case with the 2010 World Cup. This requires a proper understanding of the nature of brands in the field of sports and a considered approach to using the law and the facilities that it makes available to the best and fullest extent. However, sporting bodies and administrators appear to lack a proper appreciation of how sport fits into the intellectual property sphere and fail to adopt well planned strategies to maximise the value of intellectual property, and more particularly trade mark law, in protecting their valuable brands to the fullest extent. This unfortunate state of affairs appears also to extend to Government as well and its thinking is somewhat muddled on the issue. All parties involved should understand that the administration of professional sport and the staging of major sporting events are big business and they should be treated like any other enterprise in the context of intellectual property rights. Sports brands are valuable items of property and should be treated as such. The example of FIFA and the 2010 World Cup should be salutary and its intellectual property rights protection campaign should be used as a template. When that stage has been reached sport and branding will come properly into its own.

Date published: 2012/02/20
Author: Dr Owen Dean

Tags: ip law sport events fifa