SIG Talks Sport and the Law

29 May 2015

In the world of sponsorship and events, the topic of ambush marketing is always relevant, especially in relation to high profile, high media exposure events.  

I was interested to read a recent media release by the Comrades Marathon Association titled “Comrades Marathon – Zero tolerance against ambush marketers” and it prompted me to question the basis on which the Association could take action against ambush marketers.  

In relation to an event, Ambush marketing can be defined as a planned campaign by a brand or company, without authorisation from the event organisers, to associate itself with the event with the intention of gaining exposure for its brand or company on the back of the event, without having to pay a sponsorship fee to the event organisers.

What compounds issues for the event organiser is that the common law provides no protection for an event as such and the legal view is that it is difficult to attach any precise meaning to the phrase ‘property in a spectacle’. A ‘spectacle’ cannot therefore be ‘owned’ in the ordinary sense of the word. In the American case of WCVB TV v Boston Athletics Association (1991) where an unauthorised television broadcaster broadcast the race from along the route, in competition with the exclusively authorised events broadcast rights holder, the court held that where a sports event takes place outside the boundaries of a stadium or venue, where public access is unrestricted, an unauthorised broadcast does not violate the event organiser’s property rights in the event because the event organiser does not enjoy the benefit of such rights. This reflects the current legal position on the topic in South Africa as it does in the UK, Australia and the United States. Hence the requirement for countries to legislate protection for event organisers.  

From my experience at the Comrades Marathon, the risk in relation to ambush marketing did not lie in runners wearing caps displaying the logo of a sponsor’s competitor but rather in non-sponsors taking ownership of a section of the route by erecting branding displaying their brand or company name / logo. This is clear cut ambush marketing. Often these branding areas along the route were sold by unauthorised, unscrupulous and unethical sports agents to their clients, with the sports agent managing (for a fee) the installation of the branding.  The Association received no benefit and often had to deal with an aggrieved sponsor, as the ambush marketer was often a competitor of a sponsor or supplier.  

So what exactly is ambush marketing ? There are essentially three types of ambush marketing:

  1. Ambush by association

This occurs where the non-sponsor ambusher seeks to associate itself with an event (team or player) without authorisation and consequently misleads the public into thinking the ambusher is somehow connected with the event. The most blatant examples will involve direct references being made to the event and may involve the use of a protected trademark. 

        2.  Ambush by intrusion

The incident involving the Bavaria girls appearing in bright orange mini dresses at the Holland versus Denmark match at the FIFA 2010 World Cup is a classic example of ambush marketing by intrusion. Although the dresses bore only the smallest Bavaria logo, combined with an advertising campaign in The Netherlands which featured women in identical outfits, they achieved significant media exposure.

         3. Opportunistic ambush marketing

Whether or not opportunistic advertising, which reacts and refers to topical events can genuinely be referred to as ambush marketing is up for debate. This advertising is often done in a humorous, tongue-in-cheek manner but nevertheless exhibits some of the characteristic of ambush marketing. Although undoubtedly taking advantage of public interest in an event, it is less likely to be misleading about the brand’s connection to the event. Oreo took this type of advertising to lightning-quick levels at the 2013 Super Bowl, where a power failure at the event prompted its marketing team to produce an advert featuring the image of an Oreo in dim lighting, accompanied by the line “You can still dunk in the dark”. The advert went viral on Twitter before the power was restored.

In South African law there are several remedies available to victims of ambush marketing:

  1. The existing intellectual property legislation can be relied upon if the ambush marketing constitutes an infringement of intellectual property rights such as trademarks and copyright (a civil law remedy).
  2. In common law an action for passing off can be brought (a civil law remedy).
  3. In terms of Section 9(d) of the Trade Practices Act, a person is prohibited, in connection with a sponsored event, from making, publishing or displaying 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 sponsored event, or the person sponsoring the event, or causing such statement, communication or advertisement to be made, published or displayed.

This criminal offence carries a fine of R40,000 or up to two years imprisonment for a first offence and a fine of R100,000 or up to five years imprisonment for a subsequent offence.

  1. The Merchandise Marks Amendment Act (61 of 2002) was adopted to prohibit the abuse of trade marks in respect of certain events, in anticipation of the ICC Cricket World Cup 2003 in South Africa. Section 15A prevents ambush marketing by intrusion and actually makes it unlawful for the owner of a trademark to ‘abuse’ their own trademark. It precludes a person using their own trademark in relation to a sports event in a manner that is calculated to achieve publicity for that trademark and thereby to derive special promotional benefit from the event, without the prior authority of the organisers of the event. The Act was brought in for the purposes of the 2003 ICC Cricket World Cup but was relied upon extensively during the FIFA World Cup 2010.  For Section 15(A) to apply to an event, the event must be designated by the National Minister of Trade and Industry as a “protected event” by notice in the Government Gazette, prior to the event occurring.

Any person who contravenes Section 15(A) commits a criminal offence and may be liable for a fine of R60,000 or up to three years imprisonment for a first offence and a fine of R100,000 or up to five years imprisonment for a subsequent offence

In the absence of having the event designated a protected event under The Merchandise Marks Amendment Act, the most appropriate and relevant legal remedy against ambush marketing for event organisers, assuming there is no unauthorised use of the event intellectual property, lies in Section 9(d) of the Trade Practices Act. Even then, applying it to the Comrades Marathon unauthorised route branding issue, it may be difficult to successfully prosecute such infringers. Event organisers would be well advised to make the necessary application to the Minister under The Merchandise Marks Act to secure the promulgation of their event as a “protected event”.

Cautus!

John van den Aardweg

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