Ambush marketers dealt another blow in FIFA Case

In Fédération International de Football Association (FIFA) v Metcash Trading Africa (Pty) Ltd ((53304/07) [2009] ZAGPPHC 123, October 1 2009), the High Court of South Africa has upheld FIFA's claim that Metcash Trading Africa (Pty) Ltd was competing unlawfully with it by selling a lollypop under the mark ASTOR 2010 POPS, together with the partial depiction of a South African flag and depictions of soccer balls. 
 

This judgment marks the second instance in which the High Court has effectively enjoined a trader from 'ambush marketing' the 2010 FIFA World Cup. In practice, the judgment furthers the trend established in the first case, FIFA v Eastwood Tavern, which had a similar result. The value of the Metcash Case is that the court gave a reasoned judgment, whereas in Eastwood Tavern it simply granted an order restraining the offending conduct. 

 

Section 15A of the Merchandise Marks Act 1941, a provision aimed squarely at preventing 'ambush marketing' of major sporting events, provides that no party may use a trademark (ie, even its own trademark) in relation to a protected event in a manner which is calculated to achieve publicity for that mark and thereby derive special promotional benefit from the event, without the prior authority of the organizer of such event. 'Use' of a trademark for purposes of the provision includes use in promotional activities which in any way, directly or indirectly, are intended to be brought into association with, or to allude to, the event. The provision imposes a criminal sanction. A party that can show that it is suffering damage as a result of the commission of the relevant criminal offence may, under the common law, make a claim of unlawful competition. However, it is first and foremost necessary to establish that the criminal offence has been committed.

 

In the present case, Metcash had been using its trademark ASTOR, registered in 1985, in relation to confectionary. In 2007 it adopted the contentious get-up. It offered an explanation as to its motivation in adopting this get-up, but the court rejected it and accepted that its conduct clearly disclosed an intention of marketing its product with a view to deriving special promotional benefit from the 2010 FIFA World Cup.

 

In interpreting Section 15A, the court was of the view that this provision needs no complicated interpretation, opining that "it means what it says". The court expressed the view that the words in the provision should be given their simple meaning. It found that on the evidence, Metcash had transgressed the provision and that its conduct was unlawful. The factual premise of the case, which was common cause between the parties, was that FIFA’s staging of the 2010 World Cup in South Africa enjoyed enormous publicity, and that repute and commensurate common law rights flowed from such publicity.

 

In defending the case, Metcash argued that there was a constitutional issue, and thus had recourse to the constitutional right of freedom of expression and right to use its products and trademarks in the manner and get-up that it chooses. However, the court accepted that Section 36 of the South African Constitution allowed and justified the limitation of Metcash's rights of freedom of expression or to the use of its intellectual property if such use would:

Accordingly, even though the court ought to favour an interpretation of the Merchandise Marks Act which is consistent with the Constitution, the facts of the matter did not establish Metcash’s purported constitutional defence.

 

Arguably, as in the pioneering Eastwood Tavern Case, FIFA’s approach in relying on Section 15A to bring a civil law case of unlawful competition based on the commission of a criminal offence is a sound one. Moreover, the court was correct in making a finding of unlawful competition against Metcash and in granting an injunction restraining the continued sale of the Astor product, together with its offending get-up. The court has thus struck a major blow to those seeking to 'ambush market' the 2010 FIFA World Cup.