Brazil prepares for IP battle

When the 2006 World Cup was awarded to Germany rather than South Africa, the then president of football’s international governing body FIFA, Sepp Blatter, was devastated and immediately devised a policy of continental rotation, whereby the World Cup would be held in a different continent every four years. It went to South Africa in 2010. On October 30, 2007, FIFA confirmed that the 2014 World Cup in South America would be staged in Brazil, unanimously (the only other bidders, Columbia, Argentina and Chile, had all withdrawn).

Even though Brazil won the right to stage the World Cup without competition from other countries, it still had to agree to the terms and conditions dictated by FIFA. The situation was classic Macaulay v Schroeder Music Publishing Co Ltd [1974] 1 WLR 1308, where there is no real negotiation between the parties. The Brazilian federal government had to accept the terms of the contract dictated by FIFA, or the World Cup would be staged somewhere else—England always being a willing alternative.

Everyone is equal, but some are more equal than others

Let us see what Brazil agreed to:

1.    FIFA will be exempt from paying all fees and bonds related to the courts and the Brazilian Patent and Trademark Office (INPI);

2.    Alcoholic beverages will be sold at all venues during the World Cup in 2014 and Confederations Cup in 2013 (alcoholic beverages had been banned from sporting events in Brazil);

3.    The INPI must declare all FIFA’s trademarks relative to the World Cup to be ‘of high renown’, without the need to submit evidence of fame, and within an accelerated timeframe; and

4.    The Brazilian federal government accepts all civil responsibility for the acts and omissions of FIFA and its employees.

The timeframe for consideration of FIFA-related trademarks by the INPI, as set out in Table 1 (below), is clearly preferential treatment when compared with the timeframe for all other applicants.

"‘Natal’ is the Portuguese word for Christmas, and FIFA has secured exclusive rights in Brazil over the expression Natal 2014 (Christmas 2014 in English), which will make life difficult for Santa Claus"

It can be argued that granting FIFA such preferential treatment, particularly in relation to the non-payment of court fees and INPI official fees, is unconstitutional as it breaches Article 5 of the Brazilian Constitution.

Article 5 states that all persons are equal before the law, without any distinction whatsoever, Brazilians and foreigners residing in the country being ensured of inviolability of the right to life, to liberty, to equality, to security and to property.

FIFA’S trademarks

Never an organisation to be associated with restraint, FIFA filed new applications for almost 100 trademarks to be considered of high renown (including those pictured left).

Other trademarks included: Natal 2014; Brasília 2014; Cuiabá 2014; São Paulo 2014; Rio 2014; Porto Alegre 2014; Manaus 2014; Fortaleza 2014; Belo Horizonte 2014; Curitiba 2014; Recife 2014; Salvador 2014; Brasil 2014; and Pagode.

Among the trademarks that have now been granted and enjoy the protection of highly renowned marks covering all goods and services in all classes are Pagode—a style of popular music in Brazil, over which FIFA is attempting to secure exclusive rights; and Natal 2014.

The practice of combining the name of the city hosting games with the year of the event might seem fairly reasonable, but in the case of the city of Natal it has created a peculiar problem. ‘Natal’ is the Portuguese word for Christmas, and FIFA has secured exclusive rights in Brazil over the expression Natal 2014 (Christmas 2014 in English), which will make life difficult for Santa Claus and shop holders alike, particularly as FIFA’s special privileges last until December 31, 2014. Brazilians may have a great World Cup, but Christmas promises to be something of a letdown.

Ambush marketing

Brazil has created tough criminal penalties for ambush marketing, which is the use of trademarks from non-sponsors of the World Cup, in a direct, or indirect, association with the events. Those found guilty could face a custodial sentence of between three months and one year in prison. The law defines ambush marketing by association and by intrusion as follows:

•   Ambush marketing by association: Article 32—To use trademarks, products or services, with the purpose of obtaining economic or marketing advantage, by means of direct or indirect association with events or official symbols, without authorisation by FIFA or by a person appointed by FIFA, inducing third parties to believe that such trademarks, products or services are approved, authorised or endorsed by FIFA.

•   Ambush marketing by intrusion: Article 33—To expose trademarks, businesses, establishments, products, services or to practise promotional activity non-authorised by FIFA or by a person appointed by FIFA, attracting public attention in any way in the official venues of events, with the purpose of obtaining marketing or economic advantage.

FIFA’s total exclusion zone

Article 11 of the World Cup Law (No. 12.663/13) creates a 2km exclusion zone around each World Cup venue, by land, air and sea, where only the products of the official World Cup sponsors may be sold, distributed or advertised.

Only the products from the official sponsors (pictured above left) may be sold, advertised or distributed (even for free) within the 2km exclusion zone.

This was taken to such an extreme during the Confederations Cup in June 2013 that anyone trying to enter venues with an unauthorised beverage, such as a can of Pepsi or a bottle of Carlsberg, or trying to smuggle contraband sweets or chocolate, such as a Cadbury bar, into the venues, had their sweets and beverages impounded. Thankfully, they stopped short of impounding all the mobile phones that were not registered on the mobile network Oi—nor did they interfere with people using competitor products to those of Johnson & Johnson.

At the time of writing, Brazil’s preparations to protect FIFA’s commercial interests at the forthcoming World Cup appear to be far more advanced than one or two of the stadiums are. The laws are in place, and FIFA’s trademarks are registered. It will be interesting to see how these laws are enforced in a country where even murder has a woefully low conviction rate and the imposition of custodial sentences for crimes against IP is unheard of. Come June, the eyes of the world will be upon Brazil for all kinds of reasons, and it will be extremely interesting to discover exactly what they will see.