READY, SET … COMPETE! Unfair competition and parasitic marketing at the Olympic Games

UNFAIR COMPETITION AND PARASITIC MARKETING IN THE UPCOMING ATP FINALS AND WINTER OLYMPIC GAMES

Written and edited by Alessandra Papa, in collaboration with Stefano Parro.

The recent Decree-Law of March 11, 2020 n. 16 pertaining to the organization of these two upcoming events reinforces the regulatory framework of parasitic marketing.

In the upcoming years, Italy will host two of the world’s most important sporting events: the ATP Finals will be held in Turin in the five-year period 2021-2025 and Milan and Cortina d’Ampezzo will host the Winter Olympic and Paralympic Games of 2026.

Such events represent an important business chance for companies, and the will to link their own trademarks to them is strong. However, it might prove easy to stumble upon parasitic behaviors and, in general, unlawful practices which would damage the interests of the official sponsors: this type of behavior is generally known as “ambush marketing”, a practice in which companies which are not official sponsors of the event link themselves to the event in question, taking advantage from it without any licit authorization from the organizers.

These unlawful activities can be carried out in different manners:

• through counterfeiting or unauthorized use of the distinctive signs and symbols of the event (such was the case discussed by the Court of Milan on August 14, 2003, which dealt with the marketing of an imitation of the Champions League trophy; or the case upon which the Court of Venice ruled on December 16, 2005, dealing with the registrability of trademarks containing the word “Olympic”);

• through advertising or marketing of products or services unlawfully characterized by the symbol of the event (such as when “The North Face” company decided to market some clothing apparel with the Canadian flag and characterized by a patch bearing the code “RU 14” in the period before the 2014 Sochi Winter Olympic Games, prompting the Canadian Olympic Committee to act in order to stop the initiative, judging that it was capable of depicting a false link between “The North Face” and the Committee itself in the eyes of the public); or

• through any activity of promotion of a trademark or of a distinctive sign, somehow linked to the event, which is not authorized by the organizers and which is capable of attracting the attention of the public: one of the most renowned cases dates back to the FIFA World Cup of 2006, specifically to the match between the Netherlands and the Ivory Coast of June 16. Prior to the event, the Dutch beer company Bavaria had decided to sell complementary orange shorts (upon which the Bavaria trademark was visible) with some of its products, riding on the fans’ recent tradition to wear such type of shorts (nicknamed “leeuwenhosen” by Bavaria) during the matches played by the Netherlands’ national team. However, the issue arose because Bavaria was not an official sponsor of the event; contrary to Budweiser, which in turn was. To honor the previous sponsorship agreements between FIFA and Budweiser, the organizers have thus decided to strip the Netherlands’ fans off of the clothes which bore a trademark of a non-sponsor.

The legal instruments which can be used to fend off the abovementioned and similar activities, so as to preserve the value of sponsorship and licence agreements issued by the organizers of big events, can be found, as for what concerns Italy, in the norms inscribed in the civil code concerning unfair competition, and in the specific norms on copyright and consumers’ rights.

However, the Italian legislator has decided to reinforce the legal framework concerning parasitic marketing and protection of trademarks and renowned signs pertaining to national or international sporting events and/or exhibitions, in view of the upcoming ATP Finals and Olympic Games.

The Law n. 30 of 2020, converting the Decree-Law n. 16 issued on March 11, 2020 and titled “Urgent dispositions for the organization and the execution of the Winter Olympic and Paralympic Games Milan Cortina 2026 and the ATP Finals Turin 2021-2025, and on the prohibition of parasitic activities”, has regulated, and prohibited, for the first time, a series of activities performed in connection to said events.

In particular, the forbidden conducts cited in the Decree are the following:

a) the creation of a link, albeit indirect, between a trademark or another distinctive sign and one of the sporting events or exhibitions; said link must be apt to induce the audience in error as to the identity of the actual official sponsors of the events;

b) the false representation or statement in the advertisement to be an official sponsor of the event;

c) the promotion of a company trademark or distinctive sign through any activity, unauthorized by the organizers, capable of attracting the attention of the public and of creating the false impression that the author of such activity is a sponsor of the event or exhibition;

d) the sale or marketing of products or services unlawfully characterized, albeit partially, with the symbol of the sporting event or exhibition, or with other distinctive signs of the sporting event or exhibition, when this characterization is capable of inducing the public in error as to the symbol itself and of creating the false impression of a link with the event or with its organizers or with the authorized subjects.

The violation of said norms entails an administrative sanction between 100,000 and 2.5 million euros, unless the conduct in question represents a more severe administrative offence or a criminal offence.

Nonetheless, the actual conducts will have to be pondered in the specific case, so as to balance the interests of the organizers and of the official sponsors with the ones belonging to the domains of free competition and freedom of expression.