South Africa is a sporting nation with passionate fans who support their teams both in and outside the sporting arena. These events have evolved past just focusing on the sport and are geared towards getting the maximum number of fans to the event, watching on television or other electronic media platforms, and of course, buying the related paraphernalia and memorabilia.Whilst this drive has seen the desired increase in attendance, views and merchandise sales, it has also led to vast array of intellectual property infringements that occur before, during and after the event. The most prevalent infringements are ambush marketing and the sale of counterfeit goods.
Essentially, there are 2 types of ambush marketing, ambush marketing by association and ambush marketing by intrusion. The former occurs when the trade marks, logos and symbols of the event and/or its sponsors are used unlawfully by businesses and persons who are not sponsors of the event nor associated with the event, in their advertising or to promote their business.
Ambush marketing by intrusion occurs when persons or businesses which are not sponsors of the event or associated with the event derive unfair exposure by capitalising on the publicity of the event through marketing. This may occur by unfairly advertising at or around the event. A memorable example of this was the Bavaria Girls incident that occurred during the 2010 FIFA WORLD CUP in South Africa. Beer manufacturer Bavaria (not a sponsor of the event) dressed a group consisting of 30 or more woman in orange, being the colour associated with Bavaria, despite Budweiser being the official beer sponsor of the event, thus Bavaria obtained the desired publicity it sought albeit for a short while only with the resultant removal and arrest of the ladies in question. This still remains a pertinent example of how marketers seek to ambush large scale sporting events. Some say FIFA’S approach was strong handed, whilst it must be noted that this was not Bavaria’s first attempt at ambush marketing at a FIFA World Cup.
Many companies are guilty of ambush marketing, this is done in various innovate ways, and is found at all major sporting events (e.g. The Olympics, The Comrades Marathon and various world cup events). There are however solutions to this problem in South Africa, event organisers and sponsors may rely on the provisions of the Merchandise Marks Act 17 of 1941 (should the event be designated as a protected event by the Minister of Trade and Industry and be deemed to be in interest of the public) or the Sponsorship Code of the Advertising Standards Authority to prevent ambush marketers from deriving an unfair benefit from the event without paying the necessary dues, which both provide quick and cost effective remedies.
The problem of counterfeit goods, specifically counterfeit merchandise relating to a particular sport or event is harder to tackle and far more sinister. This problem extends far beyond the vendors seeking to make a living or even the “naive” businessman looking to make a quick buck. The counterfeit goods are often the end result of syndicate driven operations linked to a variety of more heinous crimes such as drug dealing and human trafficking to name a few.
The sale of these counterfeit goods is a widespread problem as the counterfeit goods are imported (or manufactured/assembled locally) and thereafter sold by both formal and informal traders as well as being sold and/or offered for sale online or via other forms of social media and social messaging platforms.
South Africa, due to its economic and geographic positioning within Africa has become an attractive market for counterfeiters. South Africa is however one of the few African Countries wherein the enforcement of IP rights is both possible and relatively affordable for brandholders, it is also one of the few African countries that makes provision for brand recordals with Customs.
There is no quick fix to this problem. Brandholders and event organisers need to ensure effective anti-counterfeiting strategies and measures are in place well in advance of any upcoming sporting event. The upcoming Rugby World Cup to be held in England from September to November this year will highlight the above problems and hopefully the measures in place to counter these threats to the Intellectual Property Rights of the brandholders concerned.
Although this contest is to be held abroad, instances of ambush marketing and counterfeiting will no doubt be encountered locally and other international jurisdictions.
The best way for brandholders to protect against counterfeiting in South Africa is to firstly register their Intellectual Property Rights (registered trade marks and copyrighted works) with the Department of Customs and Excise, Customs. This is the cornerstone of any effective anti-counterfeiting strategy in South Africa and is done by completing and filing an application with Customs. Once this application is in place and recorded, Customs will be empowered to monitor all ports of entry (harbours, ports, airports and border posts) and detain any suspected counterfeit goods bearing the brandholders trade marks or copyrighted works.
Strategic and focussed market investigations and assessments will be the second phase. This will provide insight as to where the main problem areas lie and enable brandholders to decide on the appropriate action to be taken. For instance, if the counterfeit goods are predominantly found at informal markets or being sold by street vendors this can be combated by enforcing municipal by-laws in conjunction with the Metro Police or local SAPS.
Should these goods be encountered at formal markets and/or shops, test purchases should be conducted with a view to lodging formal complaints and conducting search and seizure operations (raids) with the appointed inspectors, including CIPC Inspectors, the DPCI (HAWKS) and/or Commercial Crimes Units of the SAPS in terms of duly obtained search and seizure warrants. These operations ensure the immediate removal of the goods from the market with a view to instituting civil and/or criminal proceedings against the infringers.
A combination of the above actions and as well as tailored anti-counterfeiting measures, including strategic stadium patrols or venue specific enforcement with the support of various branches of the SAPS, has proven to be the most effective way to combat event specific infringements.
The sporting adage “the best defence is a strong offence” most accurately describes the action required by brandholders to combat these “off the field infringements”.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.