Fifa scores in landmark ruling against ambush marketers
1/10/2009

The Pretoria High Court has handed down judgement in the matter between Fifa and Metcash Trading Africa (Pty) Limited (“Metcash”).

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 Fifa World Cup 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.

The application was launched in terms of Section 15A of the Merchandise Marks Act, which makes it unlawful for an unauthorised person to use his trade mark in a manner calculated to achieve publicity from an event which has been declared a protected event by the Minister of Trade and Industry. The Minister had declared the 2010 Fifa World Cup tournament to be a protected event as long ago as May 2006.

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. It also denoted to the public that the lollipops were licensed products or that there was some other connection or association between them and the 2010 Fifa World Cup.

In answer, Metcash alleged 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. There was no evidence to show that the South African public would perceive any connection between Metcash’s 2010 Pops mark and the 2010 Fifa World Cup. Fifa should not be granted a complete monopoly over the event and it should be enjoyed by the country as a whole, which by implication means free commercial exploitation by non-sponsor companies like Metcash.

In its reply, Fifa commended Metcash’s sponsorship of grassroots football projects and its support of the sport of football in general, but could not accept that this gives Metcash the right to commercially associate with the 2010 Fifa World Cup.

It is imperative that Fifa is able to restrain non-sponsor companies from associating themselves with the tournament and from deriving the commercial benefits which are intended for sponsors and licensees alone. The failure to protect the exclusivity enjoyed by sponsors and licensees could jeopardise the future of the tournament itself. It is these sponsors’ rights which the relevant sections of the Trade Practices Act and Section 15A of the Merchandise Marks Act have been devised to protect.

Fifa asked the High Court to grant an interdict against Metcash restraining it from making use of the trade mark 2010 Pops and/or 2010 in conjunction with depictions of the South African flag or parts thereof and/or depictions of soccer balls in relation to confectionary products.

The matter was heard before the Honourable Mr Justice Msimeki on 10 December 2008. In a judgement handed down on 1 October 2009, the court held that Metcash’s conduct clearly falls foul of Section 15A of the Merchandise Marks Act.

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. The court held that such conduct is unlawful.

The court pointed out that, if Metcash had only intended for its product to be associated with soccer, it would not have been necessary for it to mention the 2010 World Cup. Indeed, Metcash had admitted that it had the World Cup in mind when creating its product, which strengthened Fifa’s case.

Judge Msimeki 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 ends up 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. It has also been ordered to pay Fifa’s legal costs.

Kelly Thompson
Kelly@adamsadams.co.za
Partner

1 October 2009