How Brazil tackles ambush marketing

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The hosting of the 2014 World Cup and the upcoming Olympics in Brazil has left an important intellectual legacy in Brazil, with the concept of ambush marketing being incorporated into the legal system. Courts initially were not favourable to the sponsors of events but Brazil has since developed in this area. A number of cases since 2010 have shown infringing association with the Brazilian soccer team and the World Cup event. This has led to a debate about whether there is a need for specific regulations to combat ambush marketing or whether existing rules targeting unfair competition are sufficient. One difference is that most cases of unfair competition refer to continuous acts of dishonest competition, whereas the majority of cases of ambush marketing are one-time actions. Both legislation and doctrine on unfair competition is important to support actions to combat ambush marketing, but may not be sufficient.

Much has been said about the legacy of the major sporting events held in Brazil, particularly the material legacy in infrastructure, and this was one of the main justifications for the country's investment in these massive events.

There is no denying that Brazil has experienced growth in its infrastructure with the construction (or renovation) of stadiums, roads, airports, trains and public squares in various state capitals of the country, and especially in Rio de Janeiro, as a result of hosting these major sporting events.

As far as IP specialists are concerned, an important intellectual legacy has been left for us to analyse from the standpoint of case precedents relating to sports marketing. Sports marketing is a series of actions to promote sporting events, federations, clubs and athletes. It underpins the big-money sponsorships that help make these sporting events happen.

While the sponsorship contract is the main sports marketing opportunity, it often generates a reaction from the competitors who were not invited to this party. Based on this new market and competitor situation, we have begun to handle new and varied situations, with cases taken to court concerning the issue commonly known as ambush marketing.

The point here is not to define ambush marketing which has been broadly discussed over recent years, but rather to analyse the evolution of a series of decisions and rules and the legacy they have given to Brazil.

Certain factors have helped ambush marketing to become an issue in Brazil, such as the country's rapid economic growth, which has led to thousands of people increasing their consumption of goods and services; the exponential growth in audiences for major sporting events; and Brazil having been chosen to host three major sporting events, the Pan-American Games of 2007, the FIFA World Cup of 2014 and the 2016 Olympic Games, the latter soon to begin.

In 2009 a case was decided that was a serious setback for sponsors. This case involved two gymnasts (a brother and sister) who were hired by Guanabara Supermarket which, in addition to their image, used the event (and its mark). The decision was heard at the Civil Appellate Review (no 2009.001.52062– COB v Guanabara – 15th Chamber of the Court of Appeals of the State of Rio de Janeiro – October 6 2009), where associate justice rapporteur Celso Ferreira Filho stated that the Olympic Games "is an event which does not belong to anyone in particular, is an event which brings together most of the nations on the planet, instituted and consolidated by custom, eminently public in character, non-profit making in and of itself. In essence, it is an event considered to be the patrimony of humanity".

This decision would not have pleased the sponsors of the event and at this point we should be self-critical and acknowledge that the concept of ambush marketing had not yet been assimilated in Brazil.

In 2010, a series of lawsuits showed how much Brazil has developed in this area. These cases clearly illustrate infringing association with the Brazilian soccer team and the World Cup event.

In the first, CBF v Globex (Case no 0207030-51.2010.8.19.0001– 4th Business Court of the Judicial District of the City of Rio de Janeiro – June 24 2010) judge Ricardo Lafayette Campos noted that the plaintiff owned the registration for CBF (Brazilian Soccer Federation) mark before INPI, which protects the term and the shield. Importantly the judge understood the urgency of the situation, stating: "Nor can the plaintiff's claim wait, without prejudice, for the regular course of proceedings, since the World Cup is upon us, where the mass use of the mark is notorious, in either composite or word form, by all, seeking to obtain gain through the positive image that this event has among consumers".

Source: Gustavo Piva, Dannemann, Siemsen

In the second case (interlocutory appeal no 0033118-16.2010.8.19.0000 CBF v Cervejaria Petrópolis-Court of Appeals of the State of Rio de Janeiro- October 14 2010) associate justice-rapporteur Paulo Sérgio dos Santos noted that the use of "practically identical symbols" demonstrates "the idea of associating the mark, image and symbols of the appellee with its beers, seeking to profit by associating its mark to that of the appellee, precisely at the time of the World Cup, chiefly taking into account that it is a well-known fact that the appellee is sponsored by Ambev, with Brahma beer, competitor of the Appellant".

Source: Gustavo Piva, Dannemann, Siemsen

The third case was another interlocutory appeal (no 2010.02.01.007712-2 CBF v CEF – Federal Regional Court for the 2nd Region – November 30 2010). In this decision, federal associate justice Liliane Roriz ruled that an advertising campaign aired during the World Cup that clad puppets known as poupançudos in the Brazilian team shirts "leads to an association of their image not only with the sporting event, but also with the team itself and other symbols of the Brazilian Soccer Confederation, and may have caused it adverse effects". She concluded that this fell under the concept of unfair competition.

Source: Gustavo Piva, Dannemann, Siemsen

There was no specific legislation in 2010 to combat ambush marketing. Even if decisions seek to use the concept of unfair competition, the findings and grounds of the judge already contain concepts that smack of ambush marketing. It is also important to emphasise that the General Law of the World Cup was only enacted in 2012 where, as it is known, the rules on combating ambush marketing were instituted.

However, at the time the above suits were filed, the topic was already being discussed, even when the World Cup Law was being presented in the form of a bill. The fact that it was only a bill at the time may have led some to believe that there would be no legislation to prevent these acts.

These decisions reflect the first embodiments of the intellectual legacy of these major sporting events, insofar as concepts of ambush marketing began to be incorporated into decisions served by Brazilian courts.

"In 2010, a series of lawsuits showed how much Brazil has developed in this area"

Many academics argue even today that there is no need for specific regulations to combat ambush marketing. In their opinion, the existing rules that combat unfair competition, which govern healthy competition and which cover unjust enrichment, are already enough to settle any existing conflicts during these mega sporting events.

Prevailing case law supports this interpretation. However, in a general manner, the number of suits relating to ambush marketing is not particularly high, and no decision has tackled head-on the core points of these theoretical discussions, to the extent that there is room to change the interpretation.

Although the situations where unfair competition and ambush marketing apply appear similar, there are significant differences between them. Firstly, it is important to bear in mind that sporting, cultural and musical events are ephemeral. The damage may occur in a game, presentation or even large audience show lasting two hours. Also, in unfair competition the companies must be competitors, which is not the case for ambush marketing.

The Courts in Brazil have created a series of precedents on unfair competition, including a decision by the Second Panel of the First Civil Chamber of the Court of Appeals of the State of Goiás (Civil Appellate Review no 65558-9/188 headnote no 253253 – rapporteur: associate justice Vítor Barboza November 26 2002). In this case the court noted unanimously that "Unfair competition is understood to be the set of practices of the businessman who, fraudulently or dishonestly, seeks to take away the clients from the competitor."

In essence, whereas most cases of unfair competition refer to continuous acts of dishonest competition, the majority of cases of ambush marketing are one-time actions. Obviously, acts of unfair competition may occur on a one-time basis, and acts of ambush marketing may be continuous – the latter normally end up in court. It is perhaps because of this that there have not been a significant number of cases of ambush marketing in Brazilian courts, as the continuous acts are usually lower in number because their origin is easy to identify, whereas for one-off acts (especially ambush marketing by intrusion), it is hard to pin civil liability on the true causer of the damage.

It is important to differentiate the regular consumer potentially hoodwinked by acts of unfair competition with the target public of a marketing action, whether he is attending the site of the event or merely watching it through existing platforms such as on television or online. Although the end is the same – taking advantage for oneself in detriment to someone else – the average consumer and the target public of a marketing action are different technical concepts which may also be exclusionary.

Both legislation and doctrine on unfair competition is important to support actions to combat ambush marketing, but may not be sufficient.

Precedents in cases of ambush marketing are continuously evolving and two other suits were filed in 2013 whose decisions are in harmony with the 2010 cases. One of these decisions has already become a specific part of these concepts.

The first case, handed down in December 2013, is a decision on a special appeal by the third panel of the Superior Court of Appeals, where the rapporteur of the proceeding, associate justice Villas Bôas Cueva, says that the elements established in the case disclose that the advertising campaign, though disguised, using merely similar symbols, was clearly designed to "pass on to Coca-Cola consumers the image of the Brazilian team or, in other words, to use the image whose rights are reserved to the Brazilian Soccer Federation to sell the commercialised product". He went further by basing his decision on the use of the plaintiff's image: "The damage is the unlawful use itself of the image, there being no need to demonstrate the pecuniary or non-pecuniary loss."

In the second case, the company Technos advertised its products (watches) using the image of former captains of World Cup winning teams raising the cup. The preliminary decision served in July 2013 gave interlocutory relief where the judge stated: "Accordingly, it is incumbent upon the judiciary to curb the practice of ´ambush marketing´ and the improper and unauthorised use of the image of the official soccer kits of the Brazilian team…The documentation entered to the record discloses that the defendant has been using an advertising campaign with symbols, which, if not exclusive to the plaintiff, are all-too similar."

A recent decision definitively shows that the concept of ambush marketing has been incorporated into the Brazilian legal system. All cases analysed so far involved the two main worldwide sporting events – the FIFA World Cup and the Olympic Games. The following case refers to the party of the Barretos Cowboys, a large cultural event held since 1956 and one which is part of the calendar of rodeo riders from all corners of the world.

In a suit brought by the Public Prosecutor`s Office against the organisers of the party for the Barretos Cowboys, the Office contended an infringement of consumer rights on account of the prohibition of entry of food and beverages not carrying the trade mark of the event sponsors.

"These decisions reflect the first embodiments of the intellectual legacy of these major sporting events"

Yet the conduct was not considered abusive according to the 7th Private Law Chamber of the Court of Appeals which upheld the decision to reject the motion by the Public Prosecutor`s Office.

The opinion served by associate justice-rapporteur Walter Barone stated that: "This practice is consolidated on the market, including abroad, without identifying real prejudice to the consumer's right". It added that the admission of competitor products would trigger the possibility of ambush marketing, defined by Law no 12,663/12 (General Law of the World Cup), inducing third parties to believe that the marks are approved, authorised or endorsed by the organiser.

In stating the grounds of his decision, the rapporteur cited an excerpt from a decision handed down by the 2nd Civil Court of Barretos: "This event was promoted by a private party, at a private venue, which the public may enter by way of paid tickets. The aim of the event, which lasts for ten days, is not just rodeos and artistic shows, but the sale of food and beverages. By analogy, it does not constitute abuse that a luxury restaurant should bar its clients from entering the venue bringing their own meals from home" (source: Press Department of the Court of Appeals of São Paulo (TJ-SP).

Although the General Law of the World Cup was enacted for that event and expired on December 31 2014, incorporating and applying this concept to other large-scale events with the understanding of protecting the greater good leaves no doubt as to the important intellectual legacy left to Brazilian courts.

Although the Olympic Act does not provide for tackling ambush marketing (there is a bill in progress before the Senate – Bill no 3221/2015 – to be voted on imminently) I have no doubt that Brazil is prepared for any issues in the run-up to the 2016 Olympics in Rio de Janeiro.

Alberto Guerra

Alberto Guerra is a senior partner of Guerra IP in Porto Alegre, Brazil