Brazil: Ambush Marketing In Times Of World Cup And Olympic Games

Sports arouse passions all over the world and influence behaviors and social values. Sports competitions mobilize the collectivity: the higher the social interest, the greater the public and their projection will be. It is not new that companies and industries have realized that more than attracting passionate supporters, the sports disclose an unexplored consumer market. Advertising in this new market moves the so called sports industry.

One of the ways of investing in this sector is by acquiring quotas to sponsor the events. In return for the funding of their organization, investors acquire exclusivity rights to display and associate their brands. Depending on the size of the event, the quotas may be considerable, and the sponsors will be limited to a "select" group that will benefit from the projection of the event where their products and services will be displayed through different means of advertising and on different media.

The practice represented by the adoption of commercial and advertising maneuvers associating the name, brand and/or other distinctive signs of a sports event to entities that have not acquired sponsorship quotas is called ambush marketing or marketing "by association".

The subjective aspect within the concept of ambush marketing is the intent of the entity making the association between its brand and a certain event of conveying a false impression to the public by making it believe that said entity is an official sponsor, whereas it is not, and with that, obtaining advantages and benefits.

However, not all forms of association imply an unlawful act. There are also marketing practices making indirect and creative associations, without necessarily violating any rights. The determination of whether a certain practice is unlawful or at least questionable from an ethical view, or not, will be on a case-by-case basis and subject to the general context.

This theme is current and arouses the interest of Brazilian companies, especially considering that the country will host the World Cup 2014 and Rio de Janeiro will host the Olympic and Paralympic Games 2016. These are classical examples of highly significant events whose names and brands are frequently associated, without their organizers' authorization, to non-sponsoring companies' brands.

The International Olympic Committee (IOC) and Fifa have been historically adopting global measures to combat the ambush marketing and are already concerned about preventing association by non-sponsors for the games in Brazil.

This is a justified concern, given that these are events involving huge sums of money. To have an idea of the level of investments, according to estimates, the World Cup 2014 will involve investments as high as US $9.42 billion in infrastructure, more than the double of the sum informed by South Africa's government. Sponsorship quotas, in turn, are estimated at US $40 to US $80 million, depending on the type of sponsor.

For the Olympic Games 2016, investments in infrastructure are estimated at US $15 billion. Sponsorship quotas, in turn, are estimated to be around US $14 and US $130 million, totaling US $570 million in investments in infrastructure, not to mention the revenue from donations and licensing.

Since the confirmation of Rio de Janeiro as the city hosting the Olympic Games 2016, IOC has been engaged in a massive combat against piracy and ambush marketing. It also relies on the commitment assumed by the own city at the time of its candidacy.

LEGAL SUPPORT

The protection of the organizer's right in the distinctive signs of the event is primarily supported by the intellectual property law, which covers rights in trademarks and copyrights in symbols, mascots, songs, etc.

It is worth pointing out that under Brazil's Industrial Property Act, the protection of the name is secured regardless of its registration as a trademark by the organizer. Hence, there is a legal protection of the name, prize or symbol, which is intrinsic to any sports event.

Brazil's Copyright Act, in turn, provides for the protection of a wide range of intellectual works, including musical compositions, paintings, illustrations, etc. The ownership of works of authorship by legal entities (as it is the case of the entities organizers of sports events) is obtained through the formalization of the assignment of rights by the author, whereas the assignee is secured patrimonial rights in the work, which include the "exclusive right to use, enjoy and dispose of the literary, artistic or scientific work."

Inasmuch as the sports event organizer is the legal owner of copyrights in symbols, mascots and songs, it will have the prerogative of preventing the protected work from being used without its authorization.

The Olympic Games are further protected by a specific law. The Nairobi Treaty provides for the protection of the Olympic symbol (the "Olympic rings"). Law no. 9615/98, also known as the Pelé Law, secures the Brazilian Olympic Committee (BOC) and the Brazilian Paralympic Committee (BPC) the exclusive right to use flags, slogans, anthems and Olympic and Paralympic symbols, further to the expressions "Olympic Games", "Olympics", "Paralympic Games" and "Paralympics". In addition, there is a more recent law, the Olympic Act, approved and enacted last year, which ratifies the protection of Olympic distinctive signs, especially those related to the Olympic Games 2016.

Despite the protection secured by the laws, the Brazilian Olympic Committee has been seeking to expand the list of expressions and distinctive signs under the exclusivity protection on the argument of preventing and stopping ambush marketing practices. It was with that purpose that it sent an official letter to the Brazilian Senate requesting the expansion of the protection under the Olympic Act to include "new terms or expressions whose use or combination with other elements may lead to a false association with the Rio Games 2016." These terms or expressions are the following: "Games", "Summer Games", "Rio", "2016", "two thousand and sixteen", "twenty sixteen", "medals", "gold medal", "silver medal", "bronze medal" and "sponsor". The proposal has not been examined yet, but it is an evidence of the degree of the organizer's intolerance to the use of elements making any mention, even if remote, to the Olympic Games.

Fifa has also been taking repressive measures. According to recent news, it has brought 2,500 lawsuits in the past three years to protect the "World Cup" mark. Similarly to the Olympic Act, there is a bill pending at the Brazilian Senate intending to define rules for advertisements and campaigns during the World Cup 2014 and the Confederations Cup 2013.

Further to reiterating the rights in marks, names, symbols and further distinctive signs of the Fifa World Cup, the project mentions "clean zones" and "clean transportation zones" consisting in established areas where "every form of street vending or non-authorized commerce, according to the local laws" and "every form of advertisement, advertising or publicity and marketing non-authorized by Fifa or the organizers, or even conflicting with the interest of the holders of rights" are forbidden, on pain of fine and other penalties.

The text of said bill tackles a quite sensitive issue, because it addresses a possible territorial delimitation and control for the advertising, which is a dangerous form of restriction to freedom of expression and free competition, constitutionally secured to all persons. In case it is approved, non-sponsor companies would be prevented from displaying their brands within a radius predefined by the local governments of the host cities, which, strictly speaking, would end up reaching and affecting the whole commerce within that geographical zone, including bars, restaurants and stores.

Fifa intends to establish rules of this nature at the host cities as part of its organizational policy. Jointly with South Africa's government, Fifa created a program intended to protect Intellectual Property assets called "Rights Protection Programme". In a nutshell, it defines a urban perimeter called "Exclusion Zone" or "Commercial Restriction Zone" which would be subject to greater restrictions to marketing and publicity actions.

Nonetheless, especially in the case of sports events of significant magnitude and great popular appeal such as the World Cup and the Olympics, the reference to those events is a daily matter. It is necessary to be cautious with the limits of the exercise of organizers' and sponsors' exclusivity rights, otherwise a situation of abuse of right will be established.

The setting of an association limit may be dim. After all, to what extent and with which legal support would the organizers and sponsors of the events have legitimacy to prevent any third parties from running campaigns using words making mention to the sports? Words as "championship", "competitions", "athletes", "medals", "Brazil", to mention just a few.

If, on the one hand, it is not acceptable that non-sponsoring companies obtain undue advantages and are unjustly enriched by means of a direct association and at the expense of another company's investmenton the other, it is necessary to ponder on the limits of the exclusivity, based on criteria of reasonability, costumes, good faith and economic or social limits in the exercise of a right.

Brazil has neither a regulation nor a consolidated case law on ambush marketing. The Olympic Act contains provisions on the control and inspection of the use of Olympic symbols, however, further to being specific to the Games, it does not contemplate all possible forms of association.

In practice, many ambush marketing events have been solved within the extrajudicial sphere. This is a field still open to debate, and it is possible to resort to the specific current rules, the Intellectual Property protection and Free Competition principles to settle any matters that may stem from those events.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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