The Rugby World Cup will be the first serious test of the Major Events Management Act (MEMA), passed by Parliament in 2007 to tighten New Zealand's ambush marketing laws as part of the deal to secure 'major event' hosting rights.
The legislation is designed to prevent unauthorised commercial exploitation of the event. Because we can expect Rugby World Cup Limited to be aggressive in protecting the interests of its official sponsors, and because it is possible to inadvertently breach MEMA's provisions, it is important that businesses familiarise themselves in advance with the MEMA regime.
Although MEMA has already been applied to four events - the FIFA Under-17 Women's World Cup 2008, FIBA Under-19 Men's Basketball World Championships 2009, World Rowing Championships 2010, and Under-19 Cricket World Cup 2010 - none of these comes anywhere near the scale or branding potential of the Rugby World Cup 2011 (RWC 2011).
The RWC 2011 played an important part in Prime Minister John Key's surprise announcement this week that November 26 will be the date of this year's general election. While that gives his opponents nearly 10 months to prepare (for the election that is, not the Rugby World Cup), Mr Key believes certainty is needed early to allow businesses and the public to make the most of the exposure the RWC 2011 will give New Zealand.
The RWC 2011 will shine the international spotlight on New Zealand with an expected global audience of over four billion. Estimates are that it will contribute over $500 million to the New Zealand economy, nearly half going into Auckland.
Sponsorship rights to an event of this magnitude do not come cheap so it is appropriate that they have statutory protection. Less black and white is the degree to which MEMA will intrude on the much larger number of unaffiliated businesses that must find the right balance between 'business as usual' and compliance with this substantially untested law.
How MEMA works
Unlike in other jurisdictions, New Zealand has introduced an 'umbrella' statute that is not specific to any one event. Whenever a suitable event hosting opportunity arises, the event may be declared a 'major event' by Order in Council. Legal protections are then afforded by MEMA to prevent 'ambush marketing' detrimental to the event organiser or its official sponsors.
MEMA deals to two forms of ambush marketing:
- by association – where an advertiser misleads the public into thinking it is an authorised partner or otherwise associated with the major event, and
- by intrusion – where advertising or an event is staged to draw the attention of an audience gathered solely for the major event.
Ambush marketing by association
MEMA gives Rugby World Cup Limited the exclusive right to grant its official sponsors and licensees permission to create an association with RWC 2011. As a general rule, only Rugby World Cup Limited can use, or authorise the use of, 'protected' RWC emblems and words for advertising or promotions, or in connection with goods and services.
Whether or not you got away with it before, you now won't be able to use protected RWC emblems or words ("Rugby World Cup", "World Cup 2011", "Webb Ellis Cup", "World In Union", to name a few), or anything closely resembling them, unless you have permission from the rights holder or fall within the limited MEMA exceptions.
It will not make much difference if you have used those protected words in the past. The introduction of MEMA changes the landscape.
The Court may presume that your representation breaches MEMA if it includes an RWC 2011 protected emblem, word or words, or representation that so closely resembles an RWC 2011 emblem or word as to be likely to deceive or confuse a reasonable person. Also, regardless of the words used, you are in breach of MEMA if your representation suggests an association with RWC 2011.
It makes no difference if your representation is qualified by words like "unauthorised" or "unofficial".
If you have not sought authorisation, limited exceptions under MEMA may apply, including where your representation is:
- personal opinion (and is made for no commercial gain)
- necessary to indicate the intended purpose of a good or service or is made by an existing business that is continuing to carry out its ordinary activities (in accordance with honest practices), or
- made for the purposes of reporting news, information, criticism or review (but not if it suggests to a reasonable person that there is an association between the news, information, criticism or review and you or your goods, services or brands).
Ambush marketing by intrusion
By notice in the Gazette, the Minister for Economic Development may declare clean zones – likely to be stadia and the adjacent roads (and the clean periods that relate to those clean zones) or clean transport routes (and the clean periods that relate to those clean transport routes). The declarations for the 2010 World Rowing Championships and FIFA U-17 Women's World Cup 2008 were issued around a month before the event and we might expect a similar timeframe for RWC 2011.
The intrusion provisions prevent any street trading and advertising within the clean zone, and advertising that is clearly visible from the clean zone.
However, MEMA does not prevent advertising in the clean zones and clean transport routes by existing organisations honestly carrying out their ordinary activities.
All black (and white), or all grey?
MEMA recognises that 'major events' rely on the very large financial commitments made by their sponsors. Understandably, those sponsors do not welcome free-riders seeking to trade off the goodwill and publicity surrounding the event.
However, MEMA's highly intrusive regulatory controls require a lot to be worked out in practice – including (in the absence of useful precedent) finding out how broad the defences and exceptions really are.
Naturally, MEMA should not shield those that set out to misrepresent an association with the RWC 2011. The first prosecution under MEMA was against CL NZ Trading Company Limited and its director Terry Lung Chan, for importing counterfeit Rugby World Cup 2011 apparel.
However, those making legitimate representations should be able to rely on MEMA (through its defences and exceptions) to provide a sensible framework for 'business as usual' in accordance with honest practices.
For now, a fair interpretation of MEMA's grey areas will require the exercise of judgement, commonsense and – if in doubt – legal advice.
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.