According to FIFA, Pepsi has implied in ads running in Argentina, Mexico, Ecuador and Russia that it is an official World Cup sponsor. Pepsi argues FIFA has “gone overboard on control”.
Who: FIFA, PepsiCo
Where: Argentina, Ecuador, Mexico
When: June 2002
PepsiCo has endorsement contracts with a number of top football players participating in the Japan/Korea FIFA World Cup 2002. These include David Beckham, Juan Sebastian Veron, Emmanuel Petit, Rivaldo and Rui Costa. However, unlike Coca-Cola which has been an official sponsor of the FIFA World Cup for 24 years, PepsiCo is not an official sponsor of the tournament.
During the tournament, Pepsi ran a number of advertisements in various countries featuring the footballers on its endorsement roster in conjunction with the phrase “Tokyo 2002″ and the Pepsi logo.
FIFA were able to obtain a court injunction in Argentina restraining PepsiCo from using one such advertisement, on the basis that it suggested a “presumed sponsorship relationship” and could therefore cause confusion among consumers. FIFA is apparently taking proceedings in Ecuador in relation to similar commercials and has also locked horns with PepsiCo in Mexico.
Why this matters:
These cases highlight the problems of “ambush” marketing and the difficulties that can arise when endorsements and sponsorship arrangements clash. In the sports sector, there is ample opportunity for this kind of conflict, with individuals, local teams, leagues, national teams, tournaments, venues and TV coverage all being available as sponsorship/endorsement properties.
PepsiCo’s strategy of raising its brand’s profile during the World Cup by association with certain top players in the tournament necessarily brings it close to suggesting a level of association with the tournament itself.
While PepsiCo may see this as fair game, FIFA clearly sees an element of “ambush” or “parasitic” marketing in PepsiCo’s activities and accuses Pepsi of riding on the coat-tails of the World Cup without being an official sponsor.
Would FIFA be able to succeed in a similar case here in the UK? Well, if PepsiCo’s advertising suggested strongly enough that Pepsi was an official sponsor of the World Cup, then FIFA probably would have a reasonable case under the law of passing off and/or the law of malicious falsehood. (But note that a prominent disclaimer making it clear that Pepsi is not an official sponsor might in some circumstances be enough to avoid these risks in an ad containing material that might otherwise have suggested some kind of sponsorship connection.) Any use of FIFA trade marks, such as FIFA WORLD CUP, would also give rise to a strong legal risk.