International Report on Question b : Ambush Marketing Too Smart to Be Good ? Should Certain Ambush Marketing Practices Be Declared Illegal and If Yes, Which Ones and Under What Conditions?
VI.Limits to the Exclusive Rights of Organisers and Official Sponsors
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- Fundamental Freedoms
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VI.Limits to the Exclusive Rights of Organisers and Official SponsorsThe issue is to determine in which circumstances the exclusive rights of organisers or official sponsors should give precedence to the rights of participants, or other sponsors. The issue is one of a conflict of rights. Contractual freedom allows to a great extent the organiser of an event to impose rules - on the public through terms and conditions attached to the sale of tickets, - on athletes or teams by conditioning participation to a competition to signing specific terms and conditions restricting the freedom of athletes, - on its own members (federation). There are limits however, imposed by the freedom of movement of workers (Art. 39 of the EC Treaty), the freedom of movement of services (art. 49 of the EC Treaty), constitutional rights relating to economic activities, the freedom of expression (art. 10 ECHR), etc.. Can the ambush marketer avail itself of certain defences resulting directly from intellectual property or other specific statutes, or from fundamental freedoms. For instance, is the mere fact of mocking a competitor through an advertisement the expression of freedom of thought or denigration? Should that question be resolved within the application of unfair competition law or by reference to higher ranking principles? When an athlete is forced to refrain from displaying the name, logo etc. of its own sponsor during a competition to the profit of the competition’s official sponsor, is this conflict to be resolved within contractual freedom, antitrust, unfair competition or higher ranking principles? These issues are still relatively unexplored. Writings on ambush marketing are usually more driven towards fighting ambush marketing for the benefit of sport. Writings and decisions on antitrust issues have usually focused on issues pertaining to the transfer of players, collective bargaining of TV rights and a few abuse of dominance cases in relation to the exploitation of rights related to an event. None really focused on sponsoring activities and the exclusivity granted to sponsors. As a result, not much was reported on these issues in the surveyed countries. Therefore, we will limit our contribution to bringing up these questions.
The issue may be particularly relevant in relation to anti-ambush marketing statutes. Here the protection is granted in relation to signs beyond trademark protection and without respect for the risk of confusion between the products and services. The issues raised by the the dissenting judges in the US Supreme Court case SFAA vs. USOC, show that it is necessary to set limits to the very broad protection granted by these statutes118. The case was about a not-for-profit Californian association intending to promote the “Gay Olympic Name”. The United States Olympic Committee brought suit for injunctive relief based on the US Amateurs Sports Rights Act of 1978. The Federal District Court granted the USOC summary judgment, the Court of Appeals affirmed and the SFAA brought the case to the Supreme Court. SFAA argued that reserving the word “Olympic” for the USOC violated the first amendment as it prevented the SFAA to express a political statement about the status of homosexuals in society, through the organisation of the “Gay Olympic Games”. The Supreme Court found that the Amateurs Sports Act only restricted the manner in which the SFAA might convey its message. However, it did not prevent it from calling its games the “Gay Games”. The incidental restriction to the SFAA’s rights was therefore proportionate119. This was one of the points on which two of the judges dissented. Not only was the USOC actually representing governmental interests and therefore was subject to governmental action scrutiny, but the authority granted to it under the Amateurs Sports Rights Act over use of the word “Olympic” far surpassed that provided by a standard trademark. According to the dissenting opinion, “the Court ignores the serious First Amendment problems created by its interpretation”.(...) “The statute is overbroad on its face because it is susceptible of application to a substantial amount of noncommercial speech, and vests the USOC with unguided discretion to approve and disapprove others’ noncommercial use of “Olympic”. Moreover, by eliminating even noncommercial uses of a particular word, it unconstitutionally infringes on the SFAA’s right to freedom of expression”120. Such issues may crop again in countries adopting over broad protection for event organisers121. In the UK, LOGA contains a list of defences inspired by trademark law based on fair use122.
As a matter of principle, the fact that ambush marketing campaigns are commercial in nature does not prevent an argument to be made on the basis of fundamental rights, such as the freedom of speech or of press123. This is true in the United States and in all countries party to the European Convention on Human Rights. In the United States, provided an advertising does not infringe trademark law, it may stand behind the protections of the First Amendment124. According to the European Court of Human Rights, in Article 10 of the ECHR, “no distinction is made in it according to whether the type of aim pursued is profit-making or not”. As a result article 10 was declared applicable to the publicity made by an attorney containing its name, profession, address and telephone number published in various periodicals125. Restrictions to the freedom of expression are valid provided they are based on a law, justified by public interests and proportionate. Typically justified restrictions are those aiming at preventing unfair competition and untruthful or misleading advertising126. Moreover, the restriction must be the fact of a governmental authority. In the case of ambush marketing practices, the conflict is usually among private parties and therefore not subject to fundamental freedoms arguments. It is only in countries where National Sports Federation are entrusted with public powers that a party may directly complain for violation of certain freedoms. In Switzerland, fundamental rights may have the so-called horizontal effects of fundamental freedoms, in the sense that such fundamental freedoms will be taken into consideration when interpreting the relevant statutes in disputes between private parties. The issue will thus usually be resolved at the level of the application of the trademark law or unfair competition law. In most cases, there will not be any competing use of a distinctive sign as a trademark and therefore no issues of trademark law when a sign is simply mentioned in an article or contribution. For instance under the Swiss Trademark Act, there will be no conflict with the exclusive rights granted to trademark holders under article 13. In relation to Unfair Competition, and provided the controversial advertising or publication may have an effect on competition in general, issues of freedom of expression for instance will be dealt within the parameters of the Swiss Act Against Unfair Competition. For instance, a leaflet warning consumers on the possibility to catch the mad cow disease when eating beef meat was considered as subject to the Swiss Act Against Unfair Competition, but not contrary to its specific clauses127. In other words, it is often within the interpretation of the applicable intellectual property or unfair competition laws, that the issue will be resolved.
The conflict between economic freedoms will usually be resolved at the level of statute interpretation. Contractual freedom shall prevail within the limits set forth by the prohibition on certain unfair terms and antitrust for instance. In the case of Switzerland, attention should be paid to article 27 of the Swiss Civil Code protecting personality and as a result economic rights of an individual. Article 27 protects parties from excessive obligations and may be set in motion when the economic destiny of an individual is in danger or in the hand of a third party. In such cases, contractual obligations to do or to refrain imposed on the person who is dependent on the other party may be declared void or more simply reduced. An example in the field of sports, perhaps not the clearest application of article 27 CCS, is the decision made by the Swiss Supreme Court in a transfer of player case: the rule under which players have to wait for a formal authorisation from their club to be transferred in another club was putting the players in a state of complete dependency towards their club and employer128. It is however hard to imagine a situation of complete dependency toward a sponsor, in particular a sponsor of a sport event.
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