Ambush marketing: the lie of the land in Brazil

Major sporting events have attracted increasing economic and social attention over recent decades. Companies have recognised that sponsoring major sporting events offers a lucrative and fruitful platform for communication.

This, in turn, has led to a considerable increase in the number of companies lending their support to such events. In general terms, their goal is to transfer some of the attention paid to a major event, and the prestige attached to it, to their own goods and/or services or to their company generally.

Event organisers are, naturally, keen to safeguard their own interests and the financial interests of the sponsors (particularly in view of the significant expense incurred by the latter in acquiring exclusive rights of association with the events). On the other hand, there are many companies intent on deriving economic profit from major events without entering into a sponsorship agreement.

This is the area in which ‘ambush marketing’ thrives. The term encompasses the actions of non-sponsors aimed at establishing in the public mind an association with a major event and its organiser, with the goal of transferring some of the attention and the prestige attached to the event to their own goods and/or services or company, thereby profiting without offering anything in return. Ambush marketing is increasingly common at major events with strong public appeal.

The phenomenon of ambush marketing is frequently associated with major sporting events, but is not, in fact, limited to sport. It extends to all major events which attract strong media and public interest, including major cultural and even religious events which are supported by sponsors.

An ambusher can make use of a broad range of advertising measures (which may be collectively described as ambush marketing actions), ranging from the non-authorised use of a trademark to ‘creative’ advertising techniques which suggest an association with the event without encroaching on protected rights. The history of ambush marketing practices demonstrates that the most prevalent actions fall into the latter category.

The selection of Brazil as the host nation for the Football World Cup in 2014 and Rio de Janeiro as the host city for the summer Olympic Games in 2016 has increased the significance of the problem for the country.

Despite its increasing importance, however, the practice of ambush marketing is rarely addressed in detail in the Brazilian legal literature: in fact, Brazilian courts have yet to make any ruling specifically referring to the phenomenon. As the dates of these two major sporting events approach, the need for specific means of legal protection for the organisers and sponsors of major sporting events is ever more pressing.

Of significance in this regard are the provisions of trademark and unfair competition law, which are collectively set out in the Brazilian Industrial Property Law. In relation to trademark protection, the owners of event-related trademarks such as FIFA (the international football federation) and the COB (Brazilian Olympic Committee) acquire, with the registration of a mark, an established right to exclusive use of the respective sign throughout Brazilian territory.

The registration therefore includes the right to prevent third parties from using identical, or similar, trademarks for identical, or similar, goods or services.

Accordingly, the event organiser, as the owner of trademarks, is entitled to prohibit other companies from using specifically protected terms, or similar terms that might be mistaken for the protected terms when applied to similar goods or services.

It is important to note that certain types of usage, such as mentioning the trademark or the name of the event in speeches, scientific or literature works or other publications, are exempt from a challenge based on trademark law, provided the usage is not employed for commercial purposes.

“ALTHOUGH THE OLYMPIC ACT, IN GENERAL TERMS, PROVIDES SOLID SAFEGUARDS FOR THE TRADEMARK ENTITLEMENTS OF THE IOC AND THE COB, IT MAKES ONLY LIMITED PROVISION TO COMBAT AMBUSH MARKETING.”

The Law of Industrial Property also lists a number of signs that may not be registered as trademarks in the absence of the express consent of the event organiser. Examples are the name, prize/award and logo (or imitation thereof) of an official sporting event.

The law also prohibits the partial or complete reproduction, or imitation, of a third party’s registered trademark, to distinguish identical, or similar, products or services, when such use is liable to cause confusion.

The protection afforded the organiser of a major event covers both unauthorised use of eventrelated trademarks within Brazilian territory and attempts to register expressions identical or similar to the event-related trademarks and symbols (or to the event itself) for similar, or identical, products or services.

So far as the Olympic Games are concerned, the protection of Olympic symbols and Olympic terms is also provided for in the Nairobi Treaty and the Brazilian ‘Pelé’ Law (Lei Pelé).

In terms of the forthcoming 2016 Rio games, The Olympic Act (Lei do Ato Olímpico) sets out a list of symbols associated with the games, and prohibits third parties from using any such symbols for commercial purposes in the absence of express prior approval by the COB or the International Olympic Committee (IOC).

Examples of Olympic terms, for such purposes, include ‘Olympic Games’, ‘Olympic Games Rio 2016’, ‘Rio 2016’, ‘Rio Olympics’, and ‘Rio Olympics 2016’. Although the Olympic Act, in general terms, provides solid safeguards for the trademark entitlements of the IOC and the COB, it makes only limited provision to combat ambush marketing. This is due to the fact that— like the Nairobi Treaty and the Lei Pelé—it only takes into account situations in which an eventrelated sign is being used.

Brazilian trademark law establishes broad protection for the organisers of major events. In practice, however, ambush marketers generally do not rely on an event’s protected sign in order to create an association in the public’s mind between the major event and a given product or service, or the company itself.

Rather, they attempt to do so through associative advertising measures, without infringing on the protected sign per se. Trademark law cannot usually be applied to such practices.

So far as the World Cup Brazil 2014 is concerned, Draft Law PL 394/09 contains draft statutory provisions which are highly relevant. The draft law provides specific and wide-ranging protection for FIFA in relation to signs referring to the event.

In addition to the exclusive right of use of its registered event marks, FIFA will be granted the exclusive right to the commercial use of terms such as ‘Football World Cup’, ‘World Cup’, and ‘World Cup 2014’ for the period commencing with the date of entry into force of the law until the 30th day after the conclusion of the World Cup.

PL 394/09 grants FIFA exclusive rights of use for all signs listed in the statutory provisions, independently of their registration with the Brazilian Trademark and Patent Office. Furthermore, the draft law prohibits any unauthorised commercial association between goods, services and trademarks on the one hand and signs listed in PL 394/09 on the other (subject to certain specifically designated exceptions).

A truly innovative element of PL 394/09 is the introduction of the so-called ‘advertisingfree zone’, which would appear to be, potentially at least, a powerful weapon against ambush marketing actions in the immediate surroundings of event locations. No such provision was included in the Olympic Act.

It remains to be seen, however, to what degree the event organiser or FIFA can effectively prevent advertising actions which occur on private premises within these zones. Another relevant issue is that PL 394/09 makes no provision for cases where association with the major event is achieved without reference to a protected sign, or where the acts of association take place outside the ‘advertising-free zone’.

PL 394/09 fails to provide comprehensive protection against ambush marketing measures (as does the Olympic Act), since it does not apply to actions beyond the periphery of the stadiums, or to those that make reference to the event without directly encroaching on a protected sign. As stated earlier, most ambush marketing actions do not in fact make any use of signs which the event organisers can claim are protected.

Brazilian law also entitles an organiser to defend itself against ambush marketing by relying on the regulations for protection against unfair competition. Of particular significance in this regard is the statutory provision which stipulates that whoever uses fraudulent means to divert (‘poach’) a third party’s clientele, for his own benefit or for the benefit of someone else, commits an act of unfair competition.

Despite the broad reach of this provision, it remains unclear precisely to which actions it applies. Can it, for example, be applied to the mere distribution of fan merchandise featuring the mark of an ambusher? Whether deceitful means are used in such a case is arguable, and if such means were employed, can it be said that the direct purpose was to attract the customers of another company?

The legal remedies available to combat unfair competition—such as those found in trademark law—do not provide a sufficient legal basis for effective action against ambush marketing.

As an alternative, an event organiser can resort to copyright law. The precondition, though, is that the emblems, logos, or mascots of an event, in order to qualify for protection, must be original works within the terms of the law.

To the extent that the works are protected, the organiser can proceed against their unauthorised usage. In reality, however, given that most ambush marketing measures do not associate themselves with the event via protected signs, copyright law provisions offer only limited protection.

In the event of infringement of trademark or copyright or an act of unfair competition, it is open to the organiser, at any time, to claim injunctive relief and compensation for damage suffered.

Brazilian law also enables an event organiser to rely on property (land) law in proceedings against ambush marketing at the event location. The relevant rights may be reinforced by specific contractual agreements and by the terms and conditions of admission tickets.

This possibility of defence is, however, of only limited use, since, in practice, most forms of ambush marketing will not fall within the scope of the applicable legal provisions (set out in the Civil Code). In any event, the provisions offer no greater protection than can be obtained under trademark, unfair competition, and copyright law.

In light of the aspects referred to above, it can be concluded that the actual legal scenario in Brazil does not provide comprehensive protection for event organisers against ambush marketing. The rules on trademark protection are an insufficient means for fighting against undesired advertising actions, as said rules cover only those cases in which a protected sign is used to create an association with a major event. This does not generally occur during ambush actions.

While the regulations on unfair competition cover a wider range, it remains questionable whether all forms of ambush marketing—such as the mere attempt to create in some way an association between the event and its organiser on the one hand and the ambusher and its products or services on the other—fall within its scope.

An example of an activity which may fall outside the provisions of the law is the distribution of fan merchandise bearing the ambusher’s mark. Regarding copyright law, ambush marketing is covered only in exceptional cases, since most ambush marketing measures, generally, neither use nor adulterate official symbols.

The possibilities of defence derived from civil (land) law are of equally limited use in effectively protecting an organiser, since property rights can be exercised only in relation to advertising actions within the event location. Consequently, an ambusher may well find a number of options with which to create the appearance of being associated with a major event, without paying sponsorship fees.

The major events that will be held in Brazil call for urgent analysis of the problem of ambush marketing and specific statutory provisions to combat it. Tolerance of commercial exploitation of major events by third parties who contribute no financial or other support to the events themselves or their organisers is unacceptable.