Knowing the rules

RS How would you describe ‘ambush' marketing?

CG Ambush marketing occurs when a marketer attempts to exploit a sponsored property without paying for the right to do so.

Ambushing can occur through unlawful association with or intrusion into a sponsored event.

Ambush by association occurs when a party who is not a sponsor creates a perception that it is associated with an event by, for example, using the event logo in its advertising.

Ambush by intrusion occurs by actual intervention in the event itself, or by piggybacking on the reputation of the event - by a non-sponsor handing out free samples of its products to spectators, dressing up spectators in branded clothing to attract the TV cameras, or flying a streamer over the event venue.

RS Give me some South African examples...

CG At the 1995 Rugby World Cup, Coca-Cola was the main sponsor. Its main competitor Pepsi responded by handing out free drinks and sun-peaks to spectators, which showed up prominently on television.

A few years later, Reebok sponsored the Comrades Marathon. Nike retaliated by donating a sum to charity for every finisher who had its trademark ‘swoosh' label painted on his or her cheeks. Obviously, the swoosh received major television exposure, which could have caused viewers to believe that Nike was an official sponsor of the event.

RS Would this still be possible today?

CG No. Besides trademark-, copyright- and counterfeit-goods legislation, South Africa now has two landmark laws in place - the Trade Practices Act (TPA) of 2001 and the Merchandising Marks Act (MMA) of 2003 - which further protect the rights of sponsors.

RS What are their effects?

CG The TPA makes it an offence for any person to falsely imply or suggest a contractual or other association with a sponsored event.

Under the MMA, the Minister of Trade and Industry can declare a particular event to be ‘protected'. Once an event is protected, no person can use a trade mark related to that event in a manner that is calculated to achieve publicity, without the authority of the organiser of the event. These two laws came into effect shortly before the 2003 Cricket World Cup and enabled South Africa to protect the rights of major sponsors most effectively.

RS What kind of event can be designated as ‘protected'?

CG Before declaring an event to be ‘protected', the Minister must satisfy himself that it is in the public interest (i.e. of national importance) and that the organisers have created sufficient opportunities for small business, and particularly for those from previously disadvantaged communities, to derive benefit from it. Once an event is declared ‘protected', no one other than the organisers and sponsors can exploit it for commercial purposes.

The TPA differs from the MMA, however, because it applies to events that may not be ‘protected'. Offences under both Acts can result in criminal charges being brought.

RS That seems very far-reaching. What about the cap- or flag seller outside a soccer stadium in 2010 who wishes to sell his home-made goods to spectators?

CG He can only do so with the permission of the organisers, who have already licensed many small enterprises to operate during the 2010 World Cup.

RS What happens if I pitch up at the soccer inadvertently wearing a T-shirt whose logo clashes with a product of the sponsors?

CG This is not really a problem unless a group of you do it with the intention of gaining exposure for that T-shirt logo. You could then be prevented from entering the stadium (or made to change your shirt) under the conditions set out on the back of your entrance ticket - which you accepted when buying the ticket) - or by the conditions under which the stadium operates, or under the MMA or TPA.

RS Isn't this a case of legislative overkill, and an infringement of my right to wear a T-shirt of my choice?

CG Not really. Mega-events are paid for out of expensive sponsorships. Companies have forked out many millions of dollars for the sponsorship rights to an event, and are entitled to protection from competitors seeking to obtain an unfair advantage by undermining those rights. Experience has shown that legislation is needed to ensure fair play. The marketer of today is the ambusher of tomorrow - unless there are laws to protect what has been paid for.

RS Do other countries offer similar protection?

CG South Africa has led the way in giving protection to sponsors through the provisions of the MMA, and other countries are following suit. The protection we give to sponsors was strongly emphasised in presentations made to FIFA in support of our bid to stage the 2010

World Cup and was undoubtedly a factor in the decision to award the event to us.

RS In your firm's capacity as attorneys to FIFA, are you already dealing with cases of ‘ambush' marketing in advance of the upcoming World Cup?

CG FIFA's lawyers have already dealt with more than 200 probable contraventions of the law by marketers, and the frequency is bound to increase as 2010 approaches.

RS What advice would you give to entrepreneurs wishing to take advantage of the influx of foreign tourists to SA in 2010?

CG Ensure that you know the rules - and get advice when you think you might be skating on thin ice.

*Clifford Green has more than 34 years of experience in commercial law, specialising in contracts relating to sport, including sponsorships, events and player management and antiinfringement action. He has provided legal advice to the 1995 Rugby World Cup, the 2003 Cricket World Cup and the 2010 FIFA World Cup.

**This article was first published in Sponsorship SA - An Investor's Guide - for more information, click here.