EUROPE, MIDDLE EAST AND AFRICA: SOUTH AFRICA
FIFA SCORES IN LANDMARK RULING AGAINST AMBUSH MARKETERS
Author: Kelly Thompson, Adams & AdamsAmbush marketers beware: the South Africa High Court has handed down a long-awaited judgment in a case between FIFA and a local South African retailer, Metcash Trading Africa (Pty) Limited (“Metcash”) which will have a direct bearing on those attempting to associate their products and services unlawfully with the 2010 FIFA World Cup South Africa.
FIFA, represented in this matter by Adams & Adams, had launched proceedings against Metcash in November 2007 when Metcash refused to cease selling a lollipop product marketed under the name “2010 POPS” in its Trade Centre stores. The packaging of the product features images of soccer balls (in the design of the Official Ball of a past FWC tournament) combined with the South African flag. FIFA alleged that this, together with the name of the product, took advantage of the publicity surrounding the 2010 FIFA WORLD CUP event and constituted ambush marketing.
Ambush marketing, broadly defined, is any attempt by a trader to gain publicity for his/her product or service by associating the product or service with a sponsored event, without actually paying any sponsorship fees.
FIFA’s application was launched in terms of a section of South Africa’s Merchandise Marks Act which makes it unlawful for an unauthorised person to use his trade mark in relation to a “protected event” in a manner calculated to achieve publicity and thereby to derive special promotional benefit from the event. The Minister of Trade & Industry had declared the 2010 FIFA WORLD CUP tournament to be a “protected event” in terms of this section as long ago as May 2006. The section covers the use of a trade mark upon goods or in promotional activities which in any way, directly or indirectly, is intended to be brought into association with or allude to any event.
In the papers before the court, FIFA pointed out that it relies on sponsorship fees from its official licensees and sponsors to be able to stage the World Cup tournaments. A sponsor or licensee is unlikely to be willing to pay large sums of money for the benefit of being associated with the tournament if other traders are allowed to obtain the same benefits without having to pay for them. FIFA stated that the use by Metcash of the trade mark 2010 POPS, together with soccer balls and the South African flag, had the effect of Metcash obtaining an unfair advantage from the publicity surrounding the 2010 FIFA WORLD CUP event.
Metcash, on the other hand, argued that it had been for many years an active sponsor and supporter of a grassroots soccer programme and that its use of 2010 POPS was intended to benefit from that association, despite the fact that its sponsored programme has a completely different name. It also alleged that the relevant section of the Merchandise Marks Act should be narrowly interpreted in light of the right to freedom of expression.
In a judgment handed down on 1 October 2009, the South African High Court held that Metcash’s conduct clearly falls foul of the unambiguous wording of the relevant legislation. The court agreed with FIFA’s arguments and held that Metcash had intended for its lollipops to be associated with the 2010 Soccer World Cup and had also intended to derive special promotional benefit from the event. This was clear, for example, because the evidence showed that sales had gone up since the use of the offending marks was implemented and because Metcash had admitted in the court papers that it had the World Cup in mind when creating its product.
The court also held, with regard to the argument that Metcash had a right to freedom of expression and to “use its products and trade marks in the manner and get-up that it chooses”, that these rights are justifiably limited if this use deceives or confuses the public and has the effect of jeopardising an event such as the Soccer World Cup, as well as prejudicing the sponsors and licensees of the event.
Metcash has accordingly been restrained from competing unlawfully with FIFA by contravening the Merchandise Marks Act.
This is the first reasoned judgment handed down in terms of the relevant section of the Merchandise Marks Act. In essence, it has simply confirmed what already appears in the clear and unambiguous, albeit rather wide, wording of the statute itself.
Local and international businesses which are in the process of creating marketing campaigns should be very aware of the strict legislation in place in South Africa and its impact. Those who fail to familiarise themselves with the legal position could find themselves in a rather sticky (and not very sweet) situation.
