ANSWERS OF THE BRAZILIAN GROUP Question B: Ambush-marketing · marketing”, “gorilla...

ANSWERS OF THE BRAZILIAN GROUP Question B: Ambush-marketing

by Mr. RAFAEL LACAZ

Repporteur: Mr. RAFAEL LACAZ Coordinator of the Brazilian Group : Mr. JOSÉ CARLOS VAZ E DIAS Explanation The expression ambush-marketing was coined by Mr. Jerry Welsh when he was working for American Express. A typical example of ambush-marketing was the campaign by American Express during the 1994 Winter Olympics sponsored by Visa: "If you are travelling to Lillehammer, you'll need a passport, but you don't need a visa". Initially conceived and depicted as very competitive type of marketing and a way to outsmart lazy sponsorship, ambush-marketing was contested by international organisations such as the CIO, FIFA, and similar organizers of world or regional events, who labelled them as “parasite marketing”, “gorilla marketing”, “piggyback marketing”, etc. In their view, ambush-marketing was a way for competitors to take advantage of the investments made by the sponsors of such events. A distinction is usually made between marketing methods which directly infringe trademark rights or copyrights (reference or usage of the trademark or images of the official sponsor) or general and undisputed principles of unfair competition (untrue statements as its quality as an official supplier or sponsor) and more subtle marketing practices the qualification of which as unfair is more difficult or questionable. It is to address those more subtle practices that countries tempted to organise international sport events adopted specific provisions protecting the official sponsors of such events. These legislations gave rise to controversies as to their utility, effectiveness and efficiency. The main question is therefore whether or not there is a need to adapt unfair competition legislation to ambush-marketing and whether such idea is appropriate from an economic standpoint. Isn't the scope of the current legislation (in particular unfair competition) sufficient to tackle such practices when unfair or does it need to be buttressed by the introduction of specific provisions, prohibiting certain ambush-marketing practices or protecting names, logos, images, beyond the usual scope of trademark and copyright laws? Legal questions 1 Has your country enacted legislation specifically aimed at prohibiting ambush-

marketing? Or are there (concrete) plans to enact such legislation?

Brazilian Group : No. Brazil does not have a legislation specifically aimed at either prohibiting or allowing the practice of ambush-marketing. Nevertheless, the Brazilian Constitution of 1988, the Civil Code and the Industrial Property Law (Law nº 9,279/96) prohibit generally any act that may cause unlawful enrichment or unfair competition practice, which may encompass the undue association of a non-sponsor to a sport or cultural event. Furthermore, we are not aware of any discussion at the Brazilian Congress about a potential legislation that will tackle or rule ambush marketing.

Question B: Ambush-marketing

Specifically in what refers to Brazil’s Industrial Property Law, it should be stressed that section 124, item XII, states that it is not registrable as trademarks names, prizes or symbols of sporting, artistic, cultural, social, political, economic or technical official or officially recognized events, as well as imitations likely to cause confusion, except when authorized by the competent authority or entity promoting the event. Further to that, art. 195 of the Brazilian IP law deals specifically with unfair competition practice, which encompasses all acts that violate the acceptable common practices in the commercial field. The Brazilian Civil Code has also maintained the prohibition to unlawful enrichment based on illegal exploitation of third parties´ rights, such as the practice of free riders in IP rights. This prohibition is provided by Arts. 884 to 886 of the aforementioned law. The Brazilian Self-Regulatory Advertising Council (CONAR)’s Code contains a specific provision (section 31) which states that CONAR rejects any and every act that might be interpreted as an illegal free-ride taken by the advertiser to promote its own products and/or services, including ambush-marketing. CONAR does not have the status of law, as it is merely a guideline established by advertisers and advertising agencies and which sets what is allowed and what is not allowed in the field of marketing and publicity (from the ethical standpoint). In short, the only express reference to ambush-marketing activities in Brazil seems to be made by a non-legal statute (i.e., the CONAR’s Code). One important aspect of CONAR that one should take into account is that if a marketing strategy launched by an adviser is considered unethical or illegal by the CONAR Board, it does not mean that it will necessarily be interpreted in the same way by the Brazilian Courts, as such kind of activity is not expressly defined and/or allowed/not-allowed by Brazil’s legal system.

1.1 Can you describe the material contents of such legislation? Is the prohibition based on principles of fairness, interference in the economic sphere of the sponsor, misrepresentation, morality, or else? Brazilian Group : As reported above, there is no specific legislation or provisions in Brazil dealing with ambush marketing. Therefore, the broad concepts of unfair competition and unlawful enrichment should apply to this matter, which are based on commercial morality and prevention of subtle practices.

1.2 Is there a unique test applicable to identify unfair ambush-marketing from competitive marketing practices or are there several tests? Can you describe it/them? Is the test referring to an attempt to get associated with the event or to pass off as a sponsor or is the test referring to the mere fact that the ambush-marketer is obtaining visibility without contributing to the event / whilst the sponsor paid for exclusive rights? In the first case, did the introduction of these specific provisions lowered the usual standard of confusion in your country? In the latter case, how exclusive should be the right of the sponsor to trigger application of these provisions? Are the anti ambush-marketing provisions aimed at the behaviour of competitors to sponsors to such events or do they have a broader scope, i.e. prohibiting any parasitic behaviour independently from the association possibly made with the sponsors? What is the type of evidence to be produced to support an ambush-marketing claim, marketing polls, the average consumer, etc.?


Brazilian Group : As Brazil does not have any specific legislation dealing with ambush-marketing practices, we are not aware of any judicial case brought to our Courts in connection with this matter. Further to that, there is not any recognized test applicable to identify unfair ambush marketing. The only cases that we are familiar (which seems to involve ambush marketing issues) are those where the defendant uses logos, trademarks and symbols owned by sports entities, such as the trademarks “WORLD CUP” and “CAMPEONATO BRASILEIRO DE FUTEBOL” (“Brazilian Football Championship”), which are trademarks owned by FIFA - FEDERATION INTERNATIONALE DE FOOTBALL ASSOCIATION and CBF – CONFEDERAÇÃO BRASILEIRA DE FUTEBOL, respectively. Moreover, those signs represent the names of the corresponding sport events, which represent clear-cut cases of trademark infringement and unfair competition practice.

As mere example, please find reproduced below the advertising material distributed by a restaurant in the city of Rio de Janeiro during the 2006 Soccer WORLD CUP, where FIFA’s trademarks and symbols are illegally reproduced.

Bearing in min in this case that the Brazilian legislation does not define and/or ban expressly the ambush-marketing activities, the only recognized way FIFA would be compelling the restaurant to cease the use of its trademarks and symbols by means of trademark infringement and illegal enrichment. In this particular case, the unfair competition theory would not apply since the involved parties - the Brazilian restaurant and the FIFA – are not competing for the same market place. The same rationale applies to those cases where the companies merely associate their products, services and/or corporate images to a sport event without necessarily citing or reproducing the organizer’s symbols and trademarks. Please find below some examples seen during the 2006 Soccer WORLD CUP, being clear that none of these were contested by FIFA (at least before the Courts):


1.3 Does this legislation include provisions extending the protection usually offered to

the event’s registered name or official logo by trademark and copyright law to avoid any reference to the games, or the tournament or the mundial or else and reserve such references to the official sponsors only? Brazilian Group : The Brazilian Congress enacted in 1998 a law (Law nº 9,615), commonly known as “Lei Pelé” (“Pelé’s law”), which contains several provisions concerning professional sport practice in the country. As such, section 87 of this Law states that “the denomination or symbols of the entities that organize the sport practice, as well as the names and nick-names of professional athletes are of their own property, and they are not subject of any registration at any government entity”. Accordingly, registration or use of the name of a team and/or the name of an athlete without the prior authorization of the titleholder is violation of Law 9,615 of 1998, besides a trademark infringement.


Further to that, the Federal Constitution secures the effective right to a person to use its name, family name use and nick name and prohibits third parties from using it without the prior and express authorization of the titleholder. Notwithstanding the aforementioned, the use of an event without commercial intent may be framed as a limitation of trademark rights, as specified by Article 132, item IV, of the Brazilian IP Law. Therefore, in principle, it would be possible a TV manufacturer to use the following slogan to promote its own products: “Buy a TV now and watch the World Cup of Football”. That use would be legal insofar as a TV manufacturer or other businessmen uses a sign without commercial exploitation and does not want to get a free ride on the reputation of a sign, name or entity to promote its own products or service.

1.4 What is the geographic scope of the protection? Are the anti ambush-marketing provisions backed up by specific procedural provisions facilitating the recourse to tribunals in international situations? Brazilian Group : As previously reported, Brazil does not have a specific legislation which refers to anti ambush-marketing activities. Therefore, there is no specific procedure to tackle such unfair practice. Nevertheless, the provisions of the IP law, unfair competition and unlawful enrichment may be used to prohibit the ambush marketing practice, especially in court. In addition, the geographic scope of the protection is limited to the territory of Brazil.

1.5 What are the remedies available? Are there remedies specific to ambush-marketing? Who is entitled to take action against ambush-marketers, the official sponsors, the organisers, else, and under what conditions? Brazilian Group : The remedies available based on IP violation, unlawful enrichment and unfair competition practices, among others above specified would be extra court or judicial proceedings. In the former case, the infringed party could send warning-cease and desist letters to ambush-marketer. In the latter case, the infringed may file a lawsuit to seek the immediate cease of the practice and to demand compensation for losses and damages. The entitled party to act against ambush marketing practices would be the titleholder of IP rights and who is suffering any kind of loss accrued from free riding, interference on their reputation, decrease of clients etc.

1.6 Are there specific sanctions applicable to ambush-marketing practices, such as administrative or criminal sanctions? Are there specific authorities in charge of prosecuting such infringements? Are there specific provisions to facilitate enforcement in relation to international and cross-border ambush-marketing practices? Brazilian Group : In regard to administrative measures, we point at the existing rules specified in the Brazilian Code of Self-Regulatory Advertising Council (CONAR), which sets that ambush-marketing activities are to be banned (although it does not specify what acts are to be interpreted as ambush-marketing activities).


In any event, section 50 of CONAR’s Code foresees that “Those who infringe any of the terms of the Code are susceptible to: (a) warning; (b) recommendation for changing or correcting the advertisement piece; (c) recommendation for the communication channels to halt the advertisement piece; and (d) release of information showing CONAR’s opinion in relation to the advertiser, the advertising agency and the advertisement piece, in case none of the measures above are complied by the infringer. As to criminal sanctions, the infringed party may always use the intellectual property law and the unfair competition rules to seek imprisonment of those physical persons that practiced ambush marketing. Art. 189 of the IP Law sets the grounds and the requirements for a trademark violation to be framed as a criminal sanction. In regard to unfair competition, art. 195 of the IP Law provides a limited number of practices considered criminal offenses, among those “acts that aim to divert clientele by fraudulent means”. As aforementioned, the specific provisions that may be used to facilitate enforcement in relation to international and cross-border ambush-marketing practices are those found in the IP Law related to trademark infringement, unfair competition and unlawful enrichment theory.

2. What are the interests protected by the anti ambush-marketing provisions adopted in your country?

2.1 Do they aim at protecting the interests of the sponsors to the event? Do they aim

at protecting the interests of the organizer(s)? Do they aim at protecting public or private interests? Brazilian Group : The laws applicable to prevent ambush marketing practices aim to protect the interest of titleholder of IP rights, owners of clientele and business reputation and those holding the violating rights. It means that organizers, sponsors and trademark titleholder are legitimate party to seek the law protection.

2.2 How does that anti ambush-marketing legislation arbitrate conflicts of interests between those of the official sponsors on the one hand and the interests of the sponsors of the players/athletes, the interests of the sponsors of supporters, or the interests of the public on the other hand? In the absence of specific rule to arbitrate such conflicts, what are the applicable legal principles that can be used to resolve such conflicts (economic freedom vs personal freedom, usage of the public domain vs private use, constitutional principles)? Brazilian Group : Since Brazil has not any special rule on anti ambush marketing, the conflicts of interest between those of the official sponsors and those of the athletes are resolved by means of amicable negotiations with the execution of an agreement between the involved parties.


Usually, official sponsors have stringent rules on advertising of events that restrict substantially the interest of the player’s sponsors and the sponsors themselves. Since the athletes need the official events to promote themselves, one cannot find commonly in Brazil judicial problems questioning the rights of sponsors. On the other hand, official sponsors are not allowed to explore commercially the image and rights of the athletes with his prior and express authorization, when such use is not specifically and exclusively related to the sponsored event. In this perspective, the parties should take into consideration the following principles to resolve conflicts: trademark protection, image rights, unfair competition practice and unlawful enrichment. In this regard, if the organizer’s symbols and trademarks are illegally used, then the case is of trademark infringement, unfair competition practice and unlawful enrichment. At this point, please refer to the advertisement material distributed by the restaurant in the city of Rio de Janeiro and shown in item 1.2 above.

� Are the organizers resolving such type of conflicts through contractual

obligations entered into at the time of the registration of the athletes/teams to the event and forcing athletes or teams not to display any advertisements for their sponsor? Brazilian Group : Yes, conflicts are usually sorted out by means of contractual obligations, which establish the limits of the rights and obligations of the official sponsor and the athletes. In some cases, clauses may force athletes or teams not to display any advertisements for their sponsors during the happening of the event. This helps secure the commercial success of the official event, which at the end it make possible the promotion of the athlete.

� Do the entry tickets refer to terms and conditions prohibiting the audience from displaying advertisements for non official sponsors? Brazilian Group : No. There is no such prohibition to the audience (consumers) in Brazil as their objective is to watch the performance of the athletes not make any advertisement and promotion of other brands and athletes´ sponsors.

� Are such contractual obligations valid under your law? Brazilian Group : Yes, they are valid insofar they are reasonable and do not interfere with the right of consumers to exercise the product and service that it has just bought, such as the ticket for an official event in sports.

3. In the absence of specific ambush-marketing provisions in your country or in addition to

such specific anti ambush-marketing provisions, are there other legal grounds on which such practices can be prohibited? Are there, for instance, special property rights for sport events or are the current unfair competition law or trade mark principles or other principles based on civil law or else, applicable to ambush-marketing? Brazilian Group : As previously reported, although Brazil’s legal system does not cover specifically and expressly the practice of ambush-marketing, it is possible to prevent


ambush marketing by unfair competition rules (when the involved parties compete for the same market), trademark violation and the principle foresee in the Brazilian Constitution and on the Civil Law forbidding unlawful enrichment. So, technically speaking, ambush-marketing would not be considered as a trademark infringement or an unfair competition act.

3.1 Can you describe all the provisions that could be applicable to ambush-marketing

situations? Is there a criterion or test common to all these different provisions? Brazilian Group : In theory, in a complaint involving the alleged practice of ambush-marketing the organizer or official sponsor may claim the following provisions, amongst others: Section 170, items IV and V of the Brazilian Constitution; Section 884 of the Brazilian Civil Code; Section 87 of the Pelé Law, Sections 2, items III and V, 129, 189, item I, and 195, item III, all of the Brazilian IP Law; and Section 4, item VI, of the Brazilian Consumer Protection Code. Section 31 of the CONAR’s Code could be used only to support the legal arguments and to show that ambush-marketing activities are banned by this entity.

3.2 What are the available remedies and to whom?

Brazilian Group : In theory, the remedies available are warning-cease and desist letters and/or civil lawsuits. Both could be taken by the official sponsor and/or the organizer. Criminal actions do not usually come from ambush-marketing, but the rules of unfair competition and trademark violation as criminal offence may lead to the recognition of a crime.

3.3 Are there sanctions applicable (administrative or civil) and what are the

authorities entrusted with enforcement authority? Brazilian Group : Administrative sanctions could be granted by the CONAR Board. At this point, please refer to item 1.6 above. As to civil sanctions, in theory, if the organizer and/or the official sponsor are able to show the damages caused by the ambush-marketer, they could (in theory) obtain compensation for losses and damages.

Examples 4. Could you give us a list of behaviours that have been or would be considered as

prohibited ambush-marketing in your country?

Brazilian Group : Because we are not aware of any case law involving the alleged practice of ambush-marketing, we are not in a position to precise what are or what would be considered as prohibited ambush-marketing practices in Brazil. Nevertheless, one example would be or should be interpreted as ambush-marketing when a non-sponsor uses without authorization the organizer’s official logos, trademarks and symbols. In this case, this company will not be leading the consumers to think he is an official sponsor of the sport or cultural event, but will be also infringing the organizer’s trademark rights and/or copyrights.

4.1 Is any reference made to the event within a certain radius, not necessarily using the official name or logo of the event/organizers/sponsors, considered as prohibited ambush-marketing? Would that be applicable to any type of business or only to competitors of the official sponsors?


Brazilian Group : As reported above, it is our opinion that a reference or association made to a sport or cultural event by a non-sponsor, even within a certain radius (and not necessarily the use of the organizer/sponsor/event’s trademarks, logos and symbols) would not or should not be seen as an illegal attitude. In our opinion, it does not matter if the non-sponsor is based next to the stadium where the sport event is being held or miles away from this place. Also, it does not matter at all if the non-sponsor making a reference or association to the sport event is not a direct competitor of the sponsors.

4.2 Are marketing events or advertisements using athletes, referring to the sport

practiced during the event also considered as prohibited ambush-marketing? Brazilian Group : In theory, no. For example, during the 2006 Soccer WORLD CUP, the financial institution SANTANDER launched a strong commercial campaign in Brazil using the images and names of some of the soccer players of Brazil’s team (please see item 1.2. above), in a clear association with the sport event. It is our understanding that notwithstanding such blatant association, this practice should not be interpreted as an [illegal] ambush-marketing practice – again, particularly because such practice is not banned by our legal system.

4.3 Are marketing event or advertisements indirectly referring to the event during the

event, or directly referring to the event before or after the event, also considered as prohibited ambush-marketing? Brazilian Group : In theory, no, for the same reasons above.

4.4 Is the preparation and sales of products, such as pastries, food products, etc.

reproducing the logo or other images of the event, constituting ambush-marketing? Brazilian Group : Such use may be considered in Brazil as ambush-marketing and therefore reprimanded by the Brazilian law by means of illegal enrichment and trademark infringement. As previously reported, in such cases the ambush-marketing argument could be used merely to enhance the organizer and/or official sponsor’s position, by saying that the non-sponsor is taking a free ride on the goodwill and reputation of the sport event, therefore unfairly increasing its revenues. But, technically, the reproduction of the logos, signs, trademarks and images of the event would mostly infringe the Brazilian Trademark Law (and, depending on the case, also the Pelé Law).

4.5 Are disclaimers sufficient to prevent a qualification of a campaign as prohibited

ambush-marketing? Brazilian Group : Yes, disclaimers may help prevent a qualification of a campaign as prohibited ambush-marketing, since the sponsor or a team or third party would be allowed to use the trademark or campaign of a third party in a specific event.


4.6 During the event, the sponsor of a team/athlete congratulate the said team/athlete for its performance during the event. Could this be or has this been considered as prohibited ambush-marketing? Brazilian Group : No.

4.7 Assuming that there are no contractual or other provisions preventing or

prohibiting display of sponsors specific to an athlete/team, can the official sponsor reward the athletes who do not show/display the logo, the name or else of their own sponsor? Brazilian Group : Yes, but, in principle, such a reward should be regulated by means of a contract signed by the official sponsor and the athletes and teams.

4.8 Is the organisation of a parallel event in the same town, region or country, or

covering the same type of activity, possibly falling into anti ambush-marketing provisions?

Brazilian Group : No. There are in Brazil a number of soccer championships organized by different entities running at the very same time in different regions of the country. And, for many times, a team plays against another team for a certain soccer championship (e.g., the “CAMPEONATO BRASILEIRO DE FUTEBOL”, that is, the “BRAZILIAN SOCCER CHAMPIONSHIP”) and a few day latter plays with this very same team, or with another team, in the very same city where the first game was played, but for a different championship (e.g., the “CAMPEONATO PAULISTA DE FUTEBOL”, that is, the “SOCCER CHAMPIONSHIP OF THE SÃO PAULO STATE”). In this case, both sport events are organized by different entities, have their own sponsors, but there are no conflicts between them. In short, in our opinion, the organisation of a parallel event in the same town, region or country, or covering the same type of activity, does not fall into anti ambush-marketing provisions (particularly because the Brazilian legal system does not provide for such kinds of is silent in what regards ambush-marketing).

4.9 Is the purchase of TV slots for advertisements around the broadcasting of the

event possibly considered as ambush-marketing and therefore prohibited? Brazilian Group : In our opinion, no, it could not be considered as ambush-marketing as prevails in Brazil the free competition and the right to contract with other parties.

4.10 Is the sponsoring of another broadcast such as an historic, news or talk-show,

regarding the event, possibly considered as ambush-marketing and therefore prohibited? Brazilian Group : In our opinion, no, it could not be considered as ambush-marketing.

Fundamental questions

5.1 In retrospect, have the specific anti ambush-marketing provisions enacted in your country been efficient to fight ambush-marketing?


Brazilian Group : There is no specific legislation in Brazil regarding ambush-marketing. Couldn't general principles of unfair competition law or other applicable legislations be sufficient to prevent the most egregious ambush-marketing practices? Brazilian Group : Yes, the principles of unfair competition and the unlawful enrichment may be used to fight efficiently ambush-marketing. However, in order to enlarge the protection, there should be a specific law regulating the issue, such as the ones in force in China, Australia and South Africa.

5.2 Could enforcement by sponsors of their exclusive rights, under the applicable specific or non-specific anti ambush-marketing provisions, be considered as constituting antitrust infringement (abuse of dominant position/monopolisation)? Brazilian Group : In principle, yes in case sponsors have a confirmed dominant position in the market and use this position abusively to restrict competition and the entry of new entrants and the rights of consumers.

5.3 To your view, is it economically efficient to allow the sponsor, and to some extent the organiser, to internalise all positive externalities created by the organisation of the sponsored event? Shouldn't the economic benefit expected from such an event, spill over the whole economy of the country/city/region organising the event and wouldn't that economy be better off if third parties could also take advantage of the event, thereby multiplying and extending its reach and consequently the returns to the sponsor/organiser? Brazilian Group : Yes, it is our understanding that it is economically efficient to have non-sponsors taking advantages of the event, thereby increasing the returns to the sponsors or organizers. Nevertheless, non-sponsors should observe some basic rules in order that they are not accused of practising unfair competition, trademark infringement and unlawful enrichment, as follows: (a) the use of an advertisement and official event by non-sponsors may not be used in a manner that will affect the reputation of the event or the sponsor; (b) the sponsors and/or organizers’ revenues may not be affected by such association or reference and (c) it should be evidenced that the whole economy of the country/region/city organizing the event takes advantages of it and (d) the use by the non-sponsor should not bring any damage or disadvantage to the organizers and/or sponsors.

5.4 To your view, is the interest of the sponsor to obtain exclusivity over the event or to maximise its visibility?


Brazilian Group : We think this question depends on the ‘culture’ of the organizer and on the importance of the event. Normally, Brazilian entities, such as the CBF – CONFEDERAÇÃO BRASILEIRA DE FUTEBOL - does not take any action against non-sponsors that merely associate or refer to its sport events (at least we are not aware of any action started in this regard). But that is not the case of FIFA and other international entities, which normally sends warning-cease and desist letters not just to those who are illegally using its trademarks, symbols and logos (which indeed consists of trademark and copyright infringements), but also against those who merely associate or refer to its sport event. Another measure normally taken is to publish information in different sorts of communication channels concerning what the sponsor/organizer understands is permitted and what he understands is not permitted. For example, during the 2006 WORLD CUP OF FOOTBALL, the Brazilian TV network TV GLOBO released in some of the most important local newspapers notes saying that it acquired from FIFA the exclusive right to broadcast the games. Thus, any and every commercial establishment taking economic advantages from the exhibition of the games (such as restaurants, bars, clubs etc.) would be infringing TV GLOBO’s exclusive rights, reason why they should obtain a license. However, the contents of such note refers to the exhibition of the games in public places (specifically in commercial establishments), and not to the association or reference to the sport event itself.

Considering that question, is your anti ambush-marketing legislation efficient? Brazilian Group : Brazil does not have anti ambush-marketing legislation.

5.5 Are there efficient non-legal answers to fence off ambush-marketing (creation of an anti ambush-marketing commission publicly stigmatising the ambush-marketing behaviour/multiplication of sponsors vs exclusivity, else)? Brazilian Group : There is no information available concerning this matter.

ANSWERS OF THE BRAZILIAN GROUP Question B: Ambush-marketing · marketing”, “gorilla...

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