What legal issues do ambush marketing and ticket scams at international sporting events raise?

Ambush marketing and ticket scams almost always involve a breach of contract.

If ambush marketing is conducted within a venue then this should automatically be a breach of ticket conditions, no matter whether it is direct or indirect ambush marketing. Direct ambush marketing is where for example, a brand intentionally claims to be an official sponsor or uses protected intellectual property without authorisation. An indirect ambush is characterised by the concept of association with an event.

If a person acquires a ticket from an unofficial source, then it is likely that the ticket will have been acquired in breach of the conditions upon which it was issued to the original applicant, if that person gains entry to the venue then this person will be a trespasser and the seller has induced the person to trespass.

If an association is created by the ambusher or the ticket reseller, then in the UK, legislation relating to trademark and copyright infringement, and passing off may also be relied upon.

What is the existing legal framework in these areas? How well does it function?

All rights holders should have an anti-infringement policy in place that addresses the means of controlling infringements, and what action can be taken in order to combat the abuse, whether it is ambush marketing or unauthorised dealing in tickets. In the UK, and many other jurisdictions, unless there is legislation in place, such as specific laws passed regarding major events such as the World Cup, Olympics or Commonwealth Games, ambush marketing and unauthorised ticket distribution may not necessarily be illegal.

If the activities are not prohibited by specific legislation they should be prohibited by ticket conditions and in order to counteract the efforts of an ambusher or unauthorised distributor of tickets, legal action can be taken by a rights holder if for example the ambush or unauthorised resale is in breach of the rights holders intellectual property rights (IPR). For example, if the ambusher infringes a trademark or copyright in its advertising campaign or in the case of an unauthorised ticket distributor, uses a protected trade mark on its website or in its domain name. Legal action may also be taken for passing off where an association is made with the event. The actions of the ambusher (if carried out within venue) and the unauthorised ticket distributor will automatically be in breach of the ticket conditions and a claim for breach of contract can also be made.

However, in all cases the use of legislation or conditions to manage infringements will only be successful if it is managed effectively. Time restraints may also apply, depending upon the duration of the event, and how soon the infringement comes to light.

Does enforcement of rights work effectively in this area?

In all cases an ambusher should be readily identifiable due to the nature of the activity--all original applicants of tickets should also be traceable.

The enforcement of rights can work effectively on site during an event if ticket technology is embraced and event personnel are adequately briefed. If a person is found to be in breach of conditions then that person can be interviewed to assist with the collation of information, refused entry or evicted from the venue, in accordance with ticket conditions.

If an ambush is set up to take place inside a venue, or a person attempts to gain entry on an invalid ticket then gate security and stewards would be required to prevent the entry of that person. If the person gains entry with a prohibited item such as a branded giveaway, a request from management to cease to wear or make use of the item should suffice and if the person refuses to follow instruction, then the person can be evicted, again in accordance with ticket conditions.

The enforcement of rights can also work effectively prior to an event and outside of a venue. Where an ambush takes place using for example billboards, private property and in the air in the surrounding area then there may be various options available which might include utilising local laws, naming and shaming the ambusher, taking legal action. However, this can cause unwanted media attention and provide the ambusher with the attention and coverage they are looking for.

A rights holder should monitor unofficial ticket distributors that advertise and sell tickets in breach of ticket conditions. Test purchasing should be carried out online and on the high street to assist with identifying the source of tickets. Action can be taken in most cases against the sellers and original applicants of tickets, if ticket conditions have been drafted correctly and sufficiently incorporated. Unofficial websites should be monitored and shut down where possible and anti-tout measures put in place, such as setting up dispersal zones.

Insofar as legal action is appropriate to deal with an infringement and the infringer is traceable, this would normally take the form of a rights holder applying for an injunction, sending a letter before action or a cease and desist letter.

What are the implications for lawyers in this area? What should they be mindful of when advising clients?

No matter what the agreed policy, infringements should be dealt with by a rights holder on a case-by-case basis. Even where the activity is illegal, the arrest of an unauthorised ticket reseller or an ambusher may cause a PR storm. Lawyers working in the event industry must also be able to advise on the local laws available to fight particular abuse, and be aware of the advances in technology.

When advising a potential sponsor or ambusher, lawyers must bear in mind the client's commercial choice between an official or ambush strategy which may be determined by the value of the gross revenue of a particular event versus the likelihood of prosecution for unofficial association with an event.

How do you see this area of law developing in the future?

Educating the consumer, legislating against ambush marketing and regulating ticket distribution is fundamental in combatting infringement at international sporting events.

If countries want to be able to compete to host lucrative sporting events, then regulating ticket selling, and legislating against ambush marketing is theoretically invaluable. Most recently we have seen Australia pass the Major Sporting Events Protection Bill 2014 which aims to prevent the unauthorised commercial use of particular marks and images associated with certain major events. No doubt other countries will follow suit.

Prohibiting ambush marketing is certainly of benefit to an event organiser and sponsor, although it may not be considered by all to be in the interests of the consumer, as it arguably limits freedom of expression and choice. However, the consumer needs to understand the reality--that sporting events can only take place with the financial support of sponsors and therefore their exclusivity needs to be protected.

Consumers also need to understand the implications of reselling tickets onto the black market, and buying from unofficial websites and touts. The links to organised crime and the need for regulation of the ticket industry have been widely reported by the Metropolitan Police. If there was no supply to the black market and no demand from consumers to buy tickets for sold out events, then the black market would cease to exist. The only way forward is to protect the consumer and grass root sport by regulating the ticket market as far as is possible--such regulation should include a blanket prohibition or cap on resale of tickets.

This article was first published on Lexis®PSL IP & IT on 1 July 2014.

Interviewed by Kate Beaumont.