Ambush marketing
The role of public authorities: Administrative procedures
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- Action of the Directorate general for competition, consumer protection and fraud prevention
The role of public authorities: Administrative proceduresAgents of the Direction Générale de la Concurrence et de la Répression des Fraudes (DGCCRF) [General Direction for Competition and Suppression of Fraud] have the power to establish whether counterfeiting has occurred in matters of trademarks. The DGCCRF may also initiate public prosecution before the criminal courts in order to have these acts stopped. DGCCRF’s agents can, in practice, use the procedures of common law, which are applicable to untrue advertising or to deceit, for all types of counterfeit. For their part, the Customs Services are granted the right to be involved in matters involving copyright, designs and models, trademarks. So, the owner of a registered trademark, of a logotyp or a copyright may request the French customs to set up a surveillance in order to control and retain any entry of goods that could constitute an infringement of his rights, in accordance with the provisions of EC Regulation n° 1383/2003 dated July 22nd, 2003 abrogating the former EC Regulation N°3295/94 of the 22nd December 1994, modified by EC Regulation 241/1999 of the 25th January 1999. In order to set such a surveillance, the plaintiff shall provide several information, as :
This procedure can be used as a prevention measure. Such a procedure prevents presumed counterfeited goods from entering and distributing throughout the national territory. Thus, Customs may retain the presumed counterfeited goods during 10 days. In the event that the holder of the intellectual property rights has not issued a procedure before the competent court within this 10-day period, the withholding shall be lifted automatically and the goods will then be released. In order to introduce his proceedings, the plaintiff may require the customs administration to communicate several information, as the names and addresses of the sender, the importer and the consignee of the goods withheld. Finally, let's mention the articles 38 and 323 of Customs code, which provide that customs administration is able to seize, on its own, any goods that may constitute a trademark infringement. B) Unfair competition and passing off acts Civil liability can be engaged on these two grounds, allowing the plaintiff to grant for damages either before the First Instance Court or before the Commerce Court, according to the quality of the defendant. However, any proceedings involving both a matter of marks and a related matter of unfair competition shall be introduced before the First Instance Court. Finally, the plaintiff may also ask for provisional measures by way of summary interlocutory proceedings in case of urgency, to protect from an impending damage, or to abate a nuisance manifestly illegal. Indeed, article 872 of the French Code of the civil procedure provides : "In all urgent cases, the president of the Commercial Court may, within the confines of the competence of the court, order in a summary procedure, all measures that do not encounter any serious challenge or which the existence of the dispute justifies" (According to articles 808 and subs., the president of the First Instance Court enjoys the same powers). Article 873 of the same Code enunciates : "The president may, within the same confines and even where confronted with a serious challenge, provide for by way of a summary procedure such protective measures or rehabilitation measures that the case justifies, either to avoid an imminent damage or to abate a manifestly illegal nuisance. In the cases where the existence of an obligation is not seriously challenged, he may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is an obligation to do".
False or misleading advertising is a criminal offence punishable as such by criminal courts, and it may also be a cause of action for unfair competition in civil courts. When the offence is prosecuted before criminal courts, the victim of false or misleading advertising is admissible as a civil plaintiff and may therefore be awarded damages. Apart from this, when illegal advertising can be prosecuted, certain measures allow such advertising to be withdrawn before the court has rendered a judgment (Article L 121-3 of the Consumer Code):
If conviction results, publication of the judgment is automatically ordered with provision for corrective publications, as well as financial penalties. The decision made is enforceable, even if an appeal is lodged. The measure ceases to have any effect in the event of the making of a decision of non-suit or release. Finally, in the event of sentencing, the court orders publication of the judgment. It may, in addition, order the publication of one or more corrective statements.
The directorate general for competition, consumer protection and fraud prevention is at first competent in advertising field. Indeed, according to articles L. 121-1 and subsequent of the French Consumer Code, any advertisement made in any form whatsoever, representations, information or presentations which are false or likely to mislead, is prohibited. Thus, according to article L. 121-2 of the French Consumer Code, agents from the directorate general for competition, consumer protection and fraud prevention, are authorized to establish, by means of reports, offences of the provisions of article L. 121-1 of the same code. They may ask the advertiser to provide them with all the items which constitute evidence of advertising representation, information or presentations. They may also ask the advertiser, the advertising agency or the media manager to provide them with the advertising copy involved.
Those remedies are not specific to the notion of ambush-marketing as there is no legislation specifically aimed at banning ambush-marketing practices. So, many legal grounds are available to oppose those behaviours, many of them having a specific scope and dealing with particular ambush-marketing practices. Intellectual property rights can be invoked in the event of a direct attack of the sport event (reference or usage of the trademark or images of the official sponsors): ambushers obviously aim at drawing undue profits from the manifestation in misappropriating these trademarks that are distinctive, attractive and strong evocative symbols. Unfair competition and parasitic legislations concern more subtle marketing practices. For those operations, the main difficulty is to determine the frontier with marketing methods, as there is not a direct infringement of the organizers rights. But as soon as a fault, a damage and a causal link between the two are evidenced, a claim for civil liability may be brought against the ambusher. Provisions of the French Consumer code aim at protecting the French consumer against false or misleading practices.
As a consequence, the existence of a sponsor may not be a condition to be fulfilled in order to sanction an ambush-marketing practice. Not only competitors to sponsors could be sentenced for such operations. Criterion of parasitism is not the possible association made with the sponsors, but the possible association with the event itself. To sum up, it seems to us that each attempt to get wrongfully associated with the event without paying any sponsorship fees or to pass off as a sponsor may be sanctioned by one or another provision of the French law. As soon as a practice creates or is likely to create a likelihood of confusion in the mind of the public, it has to be sanctioned. Moreover, a behaviour which infringes at the very least the unfair competition and parasitic legislations could also violate intellectual property rights (if there is any reproduction of a protected matter) as well as the provisions of the French Consumer Code (if we face a deceptive advertisement, for instance). But it seems to us important to remind that there is actually no test to determine whether there are ambush-marketing operations. Although ambush-marketing is denied legal existence since no French provision mentions it expressly, it is still a concept in France. So, qualification of the marketing operations can only be resolved on a case-by-case approach. Logically, the scope of the protection offered by these anti ambush-marketing provisions is geographically limited to France. Only the acts committed on the national territory can be sanctioned by the French courts and no specific procedural provisions afford recourses to tribunals in international situations. But according to French case-law concerning intellectual property rights, French Courts are competent to rule on some practices on the internet, when some conditions are fulfilled. As Internet is intrinsically a cross-border item, that is to say the web doesn't stop to the national frontiers, the determination of the "rationae loci" jurisdiction of the national courts raises some difficulties. A priori any tribunal, on the territory of which there is an internet connection, could say it has jurisdiction. In order to limit this geographical jurisdiction, French case-law has considered that the tribunals have jurisdiction, where a "sufficient, substantial or significant" link exists between facts and damage ("lien suffisant, substantiel ou significatif")27. In practice, it means that only a website with a strong connection with France can be taken to court. Here appears the notion of "active website". Only an active website (i.e. a website intended to reach the French consumers) can be hold as for counterfeiting a French trademark by French courts. In other words, it must be checked, whether the web pages are in French, what is the currency, where can the products or services be delivered28... Therefore, jurisdiction of French courts entirely depends on the criterion of the "activity" of the website.
The various provisions of French law are based on different principles. But all tend to moralize the economic sphere, as they prevent from diverting the investments of another and disorganizing a sensitive economic market, which needs to be secured to be durable. So, on the one hand, those provisions are based on the principles of fairness and morality and on the other hand they also aim at protecting the sport events through its financial investment. Due to the variety of legal remedies available to prohibit ambush-marketing, numerous interests are at stake: first, the interests of sporting event organizers, but also the interests of the sponsors to the event, and even the interests of the public. As said above, the law on Sports dated July 16th 1984 grants sport events organizers a "reward-right". They are holder of intellectual property rights on the manifestation ("Droits voisins"), and can exploit them as they want. The purpose of these provisions is to encourage organizers to create new sport events, as the ones existing involve heavy investments. That represents a kind of consideration. The trademark and copyrights laws protect the holders of IP rights, who are most of the time the sporting manifestation organizers. IP rights also protect licensees who notably include the sponsors. Indeed, trademarks and copyrights ensure them to have the exclusive rights to exploit a sign or a creation, so as to allow them to pursue everyone, who makes an unauthorized use of it. The provisions related to unfair parasitism competitions do not concern specific interests. They shall be invoked by everyone who suffers a prejudice, that is to say organizers and sponsors to the event. Finally, the French consumer Code provisions about false or misleading advertisement aim at protecting public interests. So, admissibility on this basis is made as wide as possible, and competitors are entitled to bring an action too. In brief, French legislation protects various interests and allows to ban an unlawful activity more than to protect a specific kind of beneficiary. Whatever the protected interests are, all those provisions proscribes any creation of a likelihood of confusion or intellectual association with the manifestation. In this respect, it is interesting to notice that no provision was specifically enacted in order to offer the sponsors an adapted legal protection. They are not protected as such but this protection appears as a logical effect of the law and they can invoke to their benefit each of those provisions. Summary board of the persons entitled to bring an action:
Ambush-marketing practice could be defined as every attempt to get associated with the event, to pass off as a sponsor or to create a confusion in the mind of the public, without paying the required contribution. French law sanctions the misappropriation of the organizer's investments or notoriety and the creation of a favourable unjustified prejudice. Incriminated is the fact for companies to take undue advantage of a situation, and in the same time endanger the perennity of the event, as it brings into question its funding. Indeed, such behaviour is guilty and necessarily harms the organizer of the sporting event. Thus, the anti ambush-marketing provisions are not only aimed at the behaviour of competitors to sponsors but have a broader scope, i.e prohibiting any parasitic behaviour regardless of the association made with the sponsors. Every infringement of the exclusive rights of the sport events organizers must be sanctioned. Case law has played and still plays a great role in the struggle against ambush-marketing practices. It is up to judges to discover little by little new case of ambush-marketing practices, and to adapt the existing legal instruments to new situations. In addition to the aforesaid rulings, let us mention a decision dated March 28th 200130, in which the Court of Appeal of Paris has considered that "La société a d'évidence cherché a s'approprier à moindre coût les efforts de ceux qui ont contribué et contribuent au succès de cette manifestation sportive et à tirer profit, indirectement, de la publicité résultant de l'exploitation audiovisuelle" (the company obviously tried to misappropriate the efforts of these ones who contributed to the great success of this sporting manifestation and to take indirect advantage of the advertising resulting from the audiovisual exploitation). Such behaviour traditionally falls into the category of "ambush-marketing". To sum up, we could say that ambush-marketing is a specific form of parasitism that happens during sporting events. At this stage, because of the absence of case-law and legal precisions, we can only express our own opinion about what kind of behaviour could be described as a prohibited ambush-marketing practice:
This is a perfect example of ambush-marketing, which is not sanctionable in France. However, one could wonder whether in such a case, the theory of unjust enrichment could not be applied. However, the purchase of TV slots for advertisements around the broadcasting of the event should not be considered as ambush-marketing, as this activity falls into the normal game of TV. This is the mere principle for advertisements to take advantage of the popularity ot the TV programmes they interrupt.
The law on Sports n°84-610 dated July 16th 1984 granted federations and organizers exclusive rights of exploitation (article 18-1). Even if a former law called "Mazeaud Law" dated October 29th 1975 had prohibited high level athletes to be associated to a manifestation or an advertising campaign, economic context having changed since. So, those provisions were adapted and the French law on Sports does not contain a prohibition of sponsorship contracts or advertising contracts anymore.
For Instance, the official sponsor of the "Yellow Jersey" of the Tour de France in the category "Bank" is "Le Credit Lyonnais", although other banks ("Crédit Agricole", "Rabobank"…) take part in the bicycle racing as sponsors of a team.
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