UK: Brands and IP rights at France '98

Last Updated: 21 January 1999
By Chris Vale

Introduction

France '98 was the most watched sporting event in history. Understandably therefore, the right to be associated with such an event did not come cheaply, sponsors having paid up to £20m to associate their name or brand with the World Cup. Sponsors had to pay as much again marketing and exploiting their association with the tournament. Budweiser paid £15m towards their campaign "One World, One Game, One Beer", and this level of investment represented half of its marketing budget. Such levels of expenditure demand that rights are properly protected, policed and enforced.

Rights available

There were numerous ways in which a sponsor could associate itself with France '98. There were 3 main categories of marketing arrangements governing the rights allocated to each party:

1. Official Partner - this was an exclusive deal to companies in different product sectors. There were 4 categories of Official Partner, with decreasing rights to advertising exposure. The most important category was that of Official Sponsor, of which there were 12. Budweiser, adidas, the Mars Corporation with their brand Snickers, and Canon are examples of the 12 official sponsors. Their names were the most prominent on display at France '98. Hoardings around each game featured their names, with each sponsor being on air for an estimated 7 minutes per game. The right each Official Partner bought was the exclusive right (within its product sector) to communicate actively its brand with the 3 symbols of France '98 (the World Cup trophy, the France '98 official emblem, and the official FOOTIX mascot).

2. World Cup Product Licensee.

3. Specific advertising packages for sponsors.

With the cumulative viewing figures over twice that for the Atlanta Olympics, there was massive global exposure for those with official status. This, combined with the fact that the number of spaces for official status of sporting events is always limited, meant that there were many "unofficial" companies seeking to associate themselves with the event. Their attempts to do this are usually by way of ambush marketing and counterfeiting.

AMBUSH MARKETING

Ambush marketing is an attempt by an unauthorised party to appropriate the goodwill of an event at the expense of a rival's sponsorship of the event. An example of this is the Pepsi Cola hot air balloon flying above Wembley, on the day of the Coca Cola Cup Final. The exclusivity of the right granted is thereby diluted and the investment made is devalued.

Although inside the stadium of an event it should be straightforward to prevent attempts at ambush marketing, it can be difficult to stop determined attempts. At Euro '96, a national newspaper not connected with the event gave away plastic bowler hats outside Wembley advertising its paper. Supporters duly obliged and wore the hats inside the stadium. This type of action creates a problem in that event organisers may not be legally entitled to prevent such products being taken away from supporters as they enter the stadium, or they may simply not have sufficient warning or resources to enable them to take effective action.

Outside the event stadia it is also difficult for event organisers and/or sponsors to know how far to go to protect sponsors. For example, do, or indeed can, they prevent billboard advertisements by rival companies on prominent sites on the way to the stadium? Sponsors may expect such protection, particularly where they are being asked to part with large licence fees. However, with other potential sponsors waiting in the wings, a sponsor will not always be in a position to demand such protection.

Where the event is broadcast on commercial television, a rival company may be able to buy advertising time during a commercial break. A sponsor would wish to avoid any such embarrassment and the event organiser may avoid such a situation by ensuring that all rights in the broadcast event are dealt with at the same time, giving the sponsor an opportunity to buy the advertising time during the commercial breaks. The sponsor may wish to enter into a contract with the event organiser, which prohibits a rival company from buying such advertising time.

Once the goodwill has been ambushed, the rival has succeeded in its aim. Of course, prevention is better than cure, and policing the event should be carried out both by the event organiser and the sponsor, so that any attempt at an ambush may be swiftly acted upon.

Campaigns

In France '98, one of the most memorable advertising campaigns was carried out by NIKE, predominantly using their sponsorship of the Brazilian team to great effect. They employed their individually sponsored players (from an assortment of teams) in the NIKE commercials with the Brazilian team (the commercials on the beach), thus lessening the risk that individuals would not have a major impact on the tournament. During the first round, the adidas' campaign was struggling, having been based on Beckham (who at the time was dropped), Del Piero (who was injured), Kluivert (who had been sent off), and Zidane (who had been sent off). At time of writing, however, the adidas players were making something of a comeback. Zidane and Kluivert had completed their suspensions and were ready to return, Del Piero was back in the starting line up, and Beckham had scored from a wonderful free kick against Columbia.

Adidas were in fact the official sponsors for sports goods, yet NIKE managed to associate itself with the event in ways other than through being an official sponsor. It has to be said, however, that NIKE did pay a massive sum of money to sponsor Brazil. If, however, event sponsors cannot guarantee a certain level of safety from ambushers, then it may be more prudent to sponsor participants of the event rather than the event itself.

Official Status

Other interesting campaigns were those using official status, but not that of FIFA. So there was Sainsbury's, the Official England Supermarket, which launched new World Cup foodstuffs, and special purchase World Cup lines, such as the Official England Squad Medal Collection. There was also Carlsberg, the Official Beer of the Engand Team, competing with Budweiser, the official World Cup Alcoholic Beverage. There was even Chivers Three Lions marmalade. These companies were associating themselves/their brand with a team, England, rather than the event itself.

Use of Individuals

Lucozade, the Smithkline Beecham brand, with no official World Cup status, ran a series of adverts featuring Alan Shearer throughout the World Cup, as did FIFA official fast food restaurant,McDonald's which was the official sponsor for fast foods. In spring Asda launched a range of George clothing featuring Alan Shearer, which included a children's range, fashion and sports kits. There is even Alan Shearer night wear. The possibilities for a conflict of interest are endless. Shearer is himself sponsored by sports clothing and footwear company UMBRO, and he plays for Newcastle, whose strip is made by adidas. However, so long as the boundaries are properly drawn, actual conflict can be avoided. It is very unlikely that a rival company could have launched the range of clothes produced by supermarket Asda.

COUNTERFEITING

One of the other main concerns for brand owners seeking to promote and associate their brand name with a major event, is counterfeiting. The increase in popularity of sports merchandise has led to a corresponding increase in the number of counterfeit goods found on the market. One of the major concerns of the brand owner is that not only has the counterfeiter taken away a potential sale from the brand owner, if the copy is such that the consumer believes he has bought genuine goods, yet the quality is inferior, then the reputation of the brand owner will suffer.

A further problem is that the mere presence of fakes on the market is sufficient to damage the cachet of the genuine product. For example, the exclusivity of Lacoste products was severely diminished when the market was flooded with copies. A survey carried out recently by CDR International ("the Survey") showed that around three quarters of consumers will not buy products that have a reputation for being copied.

France '98

At France '98, the level of counterfeiting was especially high. ISL, FIFA's marketing body, had registered as trade marks the 3 France '98 symbols, and so the sale of counterfeit products bearing the same or similar marks amounted to an infringement of such trade mark rights and could be prevented.

The Survey shows that just over 50% of consumers would buy good counterfeit clothing as opposed to genuine branded goods. The essential task for the brand owner is to find a way to persuade the consumer to buy branded products as opposed to counterfeits. Once this has been achieved, the brand owner must then educate the consumer to be able to differenciate between a fake and a genuine product.

There are some very good counterfeits on the market, so good that even under close scrutiny, it is difficult to tell a fake from a genuine product. The fakes can be produced more cheaply because the counterfeiters do not incur marketing and development costs, merely the costs of copying and production.

There have even been counterfeit footballs found already for the World Cup in Japan and Korea in 2002. Counterfeiting at this World Cup is likely to be on a huge scale. Not only are many of the counterfeit goods on the market manufactured in Korea, but this is where one of the largest markets for counterfeiting can be found.

Options for the Brand Owners

Clothing manufacturers are at risk from counterfeiters, with replica national football strips, baseball caps and scarves and the like being among the most popular World Cup products. Prevention is better than cure, and it is important for brand owners and/or their agents to police the areas where counterfeiting is a problem. Consumer and enforcement authorities should be notified so that they may assist in this process.

Other methods of counteracting counterfeiting include the use of holograms, and the use of various initiatives which make known to the relevant people the differences between genuine and counterfeit products. For example, there is the publication The footballNET, produced and circulated to the relevant authorities by Rouse & Co International (with the permission of the event organisers and the Official Sponsors), in China and Europe (and several other jurisdictions). The footballNET sets out the genuine products of the Official Sponsors and gives examples of various counterfeit products.

Long Term

What may not generally be appreciated by the consumer is that some counterfeit operations may be the "legitimate" arm of a criminal enterprise. Furthermore, counterfeiters may not have the same concerns as the genuine brand owners over ethical and moral issues when it comes to child labour, and health and safety. The Survey shows that the main issue that would stop consumers buying counterfeit goods is a reputation for using child labour and for having a poor environmental record. In the long term, it may benefit the brand owners to play the ethical and moral card.

Conclusion

France '98 was transmitted to more countries than any other sports event attract around 37 billion viewers, with 500 million people watching each game. Although the event lasted just over 1 month, its images will continue to be shown for years after the final has been played, particularly as it was a memorable World Cup, which is certainly always the case in the winning country.

It is vital for sponsors to protect the investment they have made in France '98 by taking the appropriate measures to exploit the cumulative and recurring exposure of their goods to millions of viewers worldwide. It is also important for event organisers to be able to show to potential sponsors for future events that the large licence fees being asked are justified - sponsors may well be put off if the event organiser takes little interest or action to prevent dilution of the rights being offered.

The content of this article is to provide only a general information on the subject. Legal advice should be sought for any specific circumstances.

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