The Rugby World Cup 2015 - a trying time for brand owners and consumers

United Kingdom

This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.

Counterfeiting

With Rugby World Cup 2015 upon us the European trade mark office (OHIM) has published a very timely report on the economic cost of IP infringement in the EU sports goods market.

The headline finding for businesses in this sector is OHIM’s estimate that the legitimate sports industry loses approximately €500 million of revenue annually due to counterfeits on the EU market. This corresponds to 6.5% of the sector’s sales and translates into employment losses of approximately 2,800 jobs.

Interestingly, although Italy, Germany and France are the primary producers of sports goods, collectively accounting for 55% of total EU production (Italy alone accounts for more than 20% or €1.2 billion), the impact of counterfeiting tends to be felt most keenly in Eastern European countries. Lithuania tops the list with the highest percentage of sales lost to the activity. Finland suffers the least and the UK falls towards the lower end of affected EU countries.

The report may even underestimate the size of the problem since many brand owners are reluctant to reveal publicly the scale of infringement they encounter.

For the current Rugby World Cup, the organising committee launched official merchandise last year, setting up shops in major tourist centres as well as an official online store. However, websites immediately sprung up offering counterfeit items. One online marketplace is selling England polo shirts, which retail for £30 on the official website, for around £6. The fact that every official product bears a Rugby World Cup 2015 hologram assists consumers who have direct sight of the item they are purchasing, but does not help online purchasers since website listings often use misleading pictures which display the hologram.

Brand Protection

Counterfeiting isn’t the only legal issue facing those organising, sponsoring and attending the Rugby World Cup.

In return for sponsorship, the International Rugby Board gives certain exclusive rights to their sponsors and partners. To protect this exclusivity, the following Rugby World Cup official marks cannot in most circumstances be used by non-sponsors or non-partners:

Rugby World Cup
World Cup Rugby
World in Union
Rugby World Cup 2015
IRB Rugby World Cup
RWC 2015

Sponsors themselves have gone to great lengths to protect the “visual identity” of their brands against the perhaps inevitable misuse that comes as part of being an official sponsor of such a large event. For example, Canon has released a 29 page document setting out very tight guidelines on how its brand can and cannot be used in connection with the competition.

The guidance covers everything from size requirements and logo hierarchy to trade mark notices and approval processes. The document represents a very good example of how important it is to maintain control over how a brand is communicated to the public so that it remains strong and recognisable in the noise of today’s busy market.

Despite the fact that some terms are reserved purely for use by official sponsors, there are some signs which the law ensures remain open to all. A memorable example which was tried before the English courts involved the famous English rose emblem, which appears on the England rugby kit. The rose was held by the High Court (in Rugby Football Union and another v Cotton Traders Ltd (2002)) to be a badge of allegiance for the England rugby team and does not create any association with the RFU, the sport’s governing body. The RFU and its new kit sponsor, Nike, were therefore unable to prevent the old kit sponsor, Cotton Traders, from continuing to use the English rose emblem on its white rugby jerseys.

Ambush marketing

One activity worth keeping an eye out for at the Rugby World Cup is ambush marketing. This is a popular marketing technique that raises brand awareness in a covert manner, thereby enabling companies to benefit from the huge audience that the World Cup can access without having to make the significant financial outlay required of official sponsors.

Ambush marketing has been a consistent feature of major sporting events, from Kodak’s aggressive TV advertising campaign during the 1984 Olympic Games to the “Bavaria Beer Babes” at the Football World Cup in 2010.

No bespoke legislation has been implemented for the Rugby World Cup such as the anti-ambush marketing laws that were put in place for the London Olympics in 2012 to prevent unauthorised marketers attracting and influencing spectators. Event organisers must therefore rely on existing laws and regulations as well as other practical measures to prevent ambush marketing. With this in mind, organisers have secured all the outdoor media sites close to the host venues to try and create “clean” zones in and around the stadiums.

Physical marketing campaigns can therefore be prevented to some extent, but official sponsors have less control over the exploitation of the tournament via other mediums, such as social media. The exclusive trade mark rights mentioned above provide one tool and the common law tort of passing off may provide another, but sponsoring brands must be vigilant.

Fraudulent tickets

Demand for Rugby World Cup tickets since the application phase opened last year has been huge, with the initial ballot stage massively oversubscribed for many games. Despite the organising committee issuing warning messages on the official ticketing website about the dangers of buying through unauthorised third parties, a simple online search for the term ‘Rugby World Cup tickets’ provides thousands of results.

Unauthorised sellers are offering tickets with prices ranging from £657 for the England-Australia pool game, to £10,000 for the final on 31 October. Some organisations with no official link to World Rugby (the rugby union governing body) or the organising committee state that they can “provide authentic tickets for all games” or “guarantee best tickets”.

Football’s FIFA World Cup benefitted from legislation to prevent secondary ticket sales. The Rugby World Cup does not have the luxury of specific legislation, but in order to deter ticket touting, there is an officially sanctioned ticket-trading site, and in order to restrict the secondary market, tickets are only sent out shortly before the event starts.

Unofficial apps

This Rugby World Cup will see more fans access information via their smartphone than ever before. World Rugby has an official app that is free for users, but a search on some of the major app stores reveals a couple of unofficial apps. During recent major sports events, some unofficial apps, that have featured official colours and logos, appeared illegally to stream matches live. Users need to be cautious as rogue mobile apps are capable of infecting devices with viruses and can also access personal data.

Competitions/prize draws/promotions

The Rugby World Cup official marks must not be used in a way that suggests an association with World Rugby or the 2015 Rugby World Cup. Therefore, the official marks cannot be used for any promotional purposes including competitions, lotteries or games.

It may still be possible to run competitions and the like without using any of the official marks, however other laws, such as the Gambling Act 2005, which regulates competitions in the UK, must be taken into account. The Gambling Commission will be keeping a close eye on any illegal competitions or lotteries during the Rugby World Cup.