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Ambush Marketing

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Ambush Marketing

    International League of Competition Law

    Works 2007 question B "Ambush Marketing"

    The situation in Switzerland

1. Introduction

     The present report has been elaborated by a some members of the Swiss Group of the

    LIDC. It attempts to give a clear picture of the situation prevailing in Switzerland

    with regard to ambush marketing. This picture is based on a report which a task force

    of the Swiss Group of AIPPI conducted by Dr K. Troller elaborated in August 2006

    with regard to a project to legislate on ambush marketing in Switzerland.

2. Ad 1.1 to 1.6

     In principle: No-

     Switzerland has not enacted specific legislation aimed at expressly prohibiting

    ambush marketing. In this context it is interesting to note that in 2006 the Swiss

    Department of Economy (and not the Swiss Department of Justice, as this is normally

    the case) had proposed to amend the unfair competition law with a new article 3e bis,

    i.e. an article in addition to the article prohibiting unfair comparative advertising,

    with the following wording:

     "Acts in an unfair way who:

     refers without sufficient reason in a parasitic way to third parties to their products,

    works or achievements and thereby exploits their reputation."

     This addition to the unfair competition law had been proposed by the Federal

    Department of Economy upon request of UEFA, who wanted to protect the European

    Football Championship which shall take place in Switzerland and Austria in 2008

    from being commercially exploited by parties who had not been expressly authorized

    to do so by UEFA.

     The Swiss economic and legal circles were quasi-unanimously of the opinion that a

    general prohibition of a referral to third parties was not desirable in Switzerland and

    the project for amending the unfair competition law was dropped.

     Besides political grounds (mainly that it is not the Swiss legislator's task to increase

    the income of an international organization like UEFA at the charge of the Swiss

    economy), there was the legal reasoning that a party trying to create wrongly the

    impression to be in a particular (sponsoring) relation with a sports event could be

    hindered from doing so based on the one hand on the general clause of article 2 of the

    Unfair Competition Act (UCA) or on the other hand, based on the specific clauses of

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    the UCA against passing off (article 3, lit. d), against deceiving statements (art. 3, lit.

    b) or against unfair comparative publicity (art. 3, lit. e).

     Furthermore, all professional legal circles agreed that in the proposed amendment,

    the terms "refers" or "parasitic way" or "without sufficient reason" were not precise

    enough in order to reach the attempted goal.

     The experts of the Swiss AIPPI Group had proposed a clause against ambush

    marketing limited to events in the fields of sport, of culture or of economy and

    aiming at protection the organizers of such events (and not the sponsors). The Swiss

    AIPPI Group suggested the following clause:

     "Acts in an unfair way the party which offers merchandises, works or performances

    in connection with an event taking place in the fields of culture, sport or economy,

    and thereby gives the wrong impression to be in a commercial, legal or

    organizational relationship with the organizer of such event."

     This suggestion has not yet been commented by any of the concerned political or

    economic circles.

     Ad 2.1 to 2.2

     Ad 2.1.

     UCA protects the interests of three parties, namely the interests of competitors, the

    interests of consumers, an the interests of the general public. The first two are private

    interests, the third is public.

     Ad 2.2

     There are no specific rules to arbitrate ambush marketing conflicts. As a general rule,

    common sense shall be applied. There is no possibility to stop use of generic terms,

    and references to public events are allowed as long as they do not mislead the public.

     More than often, athletes or teams have separate sponsors, different from the sponsor

    of the organizer. Therefore, the athletes and teams cannot be stopped from showing

    the logos etc. of their sponsors, and spectators and fans would know that the sponsors

    of the event are not identical to the ones of the teams or athletes. Therefore,

    organizers of events have no other choice than to accept double sponsoring unless

    they would risk to loose the best teams and athletes.

     The entry tickets do to the best of our knowledge not contain any terms

    prohibiting the holder from displaying an advertisements. Such contractual

    obligations would most probably violate the personal freedom of the spectator and

    will hardly get enforced.

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     The deposit of a trademark confers no better position to the sponsor or organizer of

    an event. Trademark and copyright law will help against trademark or copyright

    infringement, but it will not help in an unfair competition claim against free-riders.

3. Ad 3

     Ad 3.1:

     The Unfair Competition Act contains several clauses which can be invoked to

    prevent unfair marketing practices. Simple parasitic behavior is not considered to be

    illegal to the extent that it is limited to take advantage in a general way of the

    reputation of someone or something and as long as this reputation does not enjoy the

    protection of a special law like trademark law or that such referral does not violate

    the private sphere of someone or the aura of his personality.

     According to article 3, lit. a UCA is considered an unfair behavior the slandering of a

    market participant (competitor, customer or any other economic actor) and the goods

    or works or performances of such actors by making statements which are incorrect,

    deceiving or unnecessarily injuring.

     According to article 3, lit. b UCA, is also considered to act in an unfair way the

    market participant who gives wrong or deceiving indications about himself, his

    enterprise, his goods, his works, his performances, his prices, his stocks, his sales

    methods or his business in general or who by doing so creates an advantage for third

    parties over their competitors.

     According to article 3, lit. d UCA, it is unfair to take measures which create a risk of

    passing off of the goods, the works or the performances or the business of someone

    else.

     Finally, according to article 3, lit. e UCA, the fact to compare in a way which is not

    exact, deceiving, unnecessarily injuring or parasitic, his person, his goods, his works,

    his performances or his prices with those of a competitor or, by acting in such a way,

    to create an advantage for third parties over as compared to their competitors, is

    considered to be unfair behavior.

     Ad 3.2 and 3.3:

     The remedies against such behavior are available to every economic actor, like

    competitors and consumers. They can choose to start a civil action for injunction and

    damages, and/or a criminal action leading to imprisonment or fine. No administrative

    sanctions are available.

     Both, civil and criminal actions are judged by the ordinary courts.

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4.

     Ad 4.1:

     In Switzerland, ambush marketing is not forbidden as such (compare above).

    Referring to an event within a certain radius is basically not considered to be unfair

    competition. Even if an event is protected by trademark registrations, the use of such

    a trademark is only protected against use as a trademark for the event, not against any

    references. E.g., if EURO 08 is protected as a trademark, a butcher may put an ad in

    the newspaper saying "I am going to sell frankfurters at every match at the EURO

    08".

     Ad 4.2:

     The athletes themselves may most probably freely refer to the events. However, a

    third party may not use the name of the athlete. The latter may be protected by the

    rights to his personality.

     Ad 4.3:

     If the reference does not lead the public to the assumption that the advertiser is an

    official sponsor of the event, there is no unfair competition and no prohibited

    ambush-marketing.

     Ad 4.4:

     If the event designation is protected as trademark for all kinds of goods, such as

    pastry, food products, shoes or tee-shirts, etc. (most event organizers will organize

    such a protection), then the use of the logo will be forbidden by trademark law and

    since it is unlawful under trademark law, will at the same time constitute unfair

    competition.

     Ad 4.5:

     As ambush marketing as such is not deemed unfair and unlawful, there is no need for

    disclaimers.

     Depending on the circumstances, a disclaimer might be helpful to clarify that the

    advertiser is not an official sponsor. If, however, the logo of an event is registered as

    a trademark then a disclaimer will not heal any illegitimate use of such logo.

     Ad 4.6

    No; any sponsor is free to congratulate its team/athlete for its performance.

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     Ad 4.7:

    If the team/athlete is obliged by a contract with the sponsor to display the respective

    logo/name, there is unfair competition since the team/athlete is induced to break a

    contract or at least to act contrary to its duty.

     Ad 4.8:

    No, organizers or sponsors of an event cannot ban parallel events, even in the same

    town, region or country. It goes without saying, however, that logo and campaigns of

    parallel events have to differ clearly from the ones of the initial event.

     Ad 4.9:

     If available, anybody is free to purchase TV slots for advertisements around the

    broadcasting of the event.

     Ad 4.10:

     At present, this would certainly not be considered as unfair behavior.

5. Ad "Fundamental questions":

     Ad 5.1:

     This question has been answered above, under 3. Since there are no anti-ambush

    marketing provisions, this is not applicable in Switzerland.

     Ad 5.2:

     It has been argued by certain organizations that powerful sport associations like

    UEFA might use their power to enforce their exclusive rights. However, no such

    cases have been decided in Switzerland.

     Ad 5.3:

     Since there are no anti ambush-marketing provisions in Switzerland, no additional

    exclusive rights are created.

     Ad 5.4:

     In Switzerland, it is argued that economy is fostered by referring to such an event and

    that the event itself may be additionally promoted by such references as well. Many

    small and medium-sized businesses are not able to sponsor big events. Under such

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    circumstances it is neither desirable nor efficient to allow the organizer or a sponsor

    to internalize all positive externalities created by the event.

     Ad 5.5:

     In Switzerland, UEFA requested specific legislation. As an organizer, UEFA is

    interested to obtain exclusivity over the event. This does not exclude, however, that it

    supports its sponsors in maximising their visibility.

     Ad 5.6:

     In Switzerland there is a "Commission pour la loyauté dans la publicité", which can

    be approached by market participants who want to complain about the behavior of

    other market participants.

Geneva/Zurich/Lucerne, 19. April 2007

     Dr Kamen Troller Dr Lucas M David Dr Gallus Joller

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