New Zealand is gearing up for the Rugby World Cup 2011 and for the international exposure the country will receive as host. Last week the Commerce Commission announced a campaign targeting businesses whose behaviour during the Rugby World Cup could fall foul of the law. This is a useful reminder to consider your legal obligations when taking advantage of the business opportunities presented by the Rugby World Cup.

Ambush Marketing

Businesses are no doubt considering innovative methods to promote their products and services during the games to reach the maximum audience and prospective clientele.

Advertising during major events such as the Rugby World Cup would generate publicity for businesses and there are possible benefits which flow from using advertising to create an association with such events. The most usual way to generate association with major events is to enter into a sponsorship agreement with the official event organiser.

Ambush marketing is a term given to the practice whereby businesses try to create an association with major events by advertising without entering into such an agreement (and by not paying official sponsorship fees) and covers numerous practices which you might not think were illegal.

The Major Events Management Act 2007 (MEMA) prohibits ambush marketing practices. This article is a brief outline of the types of issues that businesses need to be aware of and to consider when advertising, marketing and promoting their goods and services during major events, such as the Rugby World Cup.

The MEMA provides protection to the owners and official sponsors of events which have been declared to be "major events" by the New Zealand Government. Presently, there are five events which have been have been declared "major events" under the MEMA (including the Rugby World Cup). In the case of the Rugby World Cup the MEMA provides legal protection to prevent unauthorised commercial exploitation at the expense of an event organiser (Rugby World Cup Limited) or the official sponsors of the Rugby World Cup by prohibiting the following commercial activities:

Representations which suggest that individuals, businesses, brands, goods or services have an association with the Rugby World Cup when they do not. The MEMA specifically outlines certain words, logos and other trade marks (prohibited material) which cannot be used by those other than the event organiser or official sponsors.

Advertising and promotional activities can be deemed an intrusion on Rugby World Cup activities and / or the attention of the audiences of the activities. This includes prohibition on street trading in areas which are deemed to be "clean zones" – that is, defined areas around the venue of the event.

Activities that may compromise the smooth running of the Rugby World Cup, for instance, ticket scalping and pitch invasion.

Any kind of advertising which use prohibited material in order to create an association – for instance, television and radio commercials, on-line/ internet advertising, printed materials, shop displays and window dressings, or merchandise.

Penalties

Businesses that are not official sponsors of major events must be extremely careful when advertising, marketing and promoting themselves and their products and services during major events such as the Rugby World Cup so as to not create an association with such events.

If businesses are found to be in breach of the MEMA, they could be liable for civil damages as well as be subject to certain criminal sanctions.

For example, in September under the first charge to be laid under the MEMA, a man who imported fake Rugby World Cup merchandise was fined NZ$20,000 by the Auckland District Court and his company was also fined another NZ$20,000.

In light of the rigorous laws surrounding marketing during major events we strongly recommend that businesses seek legal advice before deciding on advertising, promotional and marketing activities during such events, including the Rugby World Cup, so that they do not fall foul of the MEMA or their other legal obligations.