Ticket Scalping is getting a lot of attention in Canada lately. In Ontario, Premier Dalton McGuinty made headlines by threatening to introduce legislation to stem TicketMaster’s practice of diverting potential purchasers to its resell site TicketsNow. In Saskatchewan, the Ministry of Justice and the Attorney General recently released (Warning: PDF Link)a discussion paper concerning ‘Ticket Selling and Reselling’. And in British Columbia, the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC) just filed a lawsuit against a ticket broker in an attempt to stop unauthorized sales of Olympic tickets.
Underlying the different stories is a concern for consumer protection. As the government of Saskatchewan put it in their discussion paper, there is a concern that there should be “a way to ensure that members of the public have ‘fair’ access to tickets for desirable sporting and entertainment events.” While the provinces of Ontario, Manitoba, and Alberta have specific anti-scalping legislation (Ticket Speculation Act, R.S.O. 1990, c. T.7, The Amusements Act, C.C.S.M. c. A70, s.60, and The Amusements Act, R.S.A. 2000, c. A-40, s. 25 respectively) to prevent the reselling of tickets above face value, the VANOC suit filed in British Columbia Supreme Court had no similar legislation to stand on. Instead, VANOC pursues its claims under generic consumer protection legislation, contract law, and intellectual property laws. It is the last of these that raises concern.
Trade-mark Overreach
While we have not been able to obtain the statement of claim filed by VANOC, it has been reported that VANOC is making an argument that ticket broker Coast2Coast is infringing on VANOC’s official marks. This seems problematic in two ways: (1) it usurps official mark protection for a purpose it was not intended for, and (2) related to (1), it creates an inequitable application of the law by giving VANOC a remedy for ticket-scalping that other event organizers in B.C. don’t have.
Purpose of Official Mark Protection
S. 9(1)(n)(iii) of the Trade-Marks Act, R.S.C. 1985, c. T-13 separates official marks used by ‘public authorities’ from traditional trade-marks and gives them broader protection. These marks benefit from a simple adoption and publication process (without any opposition hearings), and are not limited in the scope of their protection only to certain wares and services. The rationale behind these marks is that these are not just marks used to identify goods and services, but rather have a greater significance because they emanate from a ‘public authority’ whose identity must be especially safeguarded.
To the extent that the Vancouver 2010 Olympics played an especially important public role, parliament went even further and passed the Olympic and Paralympic Marks Act, S.C. 2007, c. 25 [OPMA] – an act which explicitly laid out the marks for which the Olympic committee wanted protection. While we don’t know if VANOC made an argument under the OPMA, the wording in s. 3 of the OPMA tracks the words in s. 9 of the Trade-marks Act fairly closely, so it can be presumed that the avenue of argument is open to them.
But what is the purpose of these protections? For official marks, it is to ensure the protection of the identity of the public authority. For the OPMA, it is to ensure that the Olympic committee can protect its sponsors from other businesses usurping their sponsorship status. Here, however, the ticket broker is trying to sell legitimate tickets obtained from VANOC. This is not a problem with the ticket broker holding themselves out to be VANOC, nor is it a problem of businesses trying to employ the Olympic marks to obtain an unauthorized benefit. Purchasers of the tickets know that these are second-hand tickets which are likely resold without the knowledge of VANOC. As such, although reselling tickets may not be socially desirable, using official mark legislation to stop such practices contorts the law to achieve an end it was not designed for.
Inequitable Application of Law
Corollary to the first problem is the second problem of the inequity that flows from only allowing Olympic organizers to have a remedy for ticket scalping but not others in similar situations. That is, because official mark protection is so broad, VANOC will likely be able to succeed under such an argument whereas an event organizer with just a regular trade-mark will not. That is because regular trade-marks are limited to preventing confusion in the marketplace. In the resale of a legitimate ticket, the event organizer’s trade-marks are used merely to describe what is being sold. There is no deception, and trade-mark law will likely not help them.
For example, if the National Hockey League’s Vancouver Canucks franchise makes it to the Stanley Cup Final this year, game tickets will undoubtedly be in high demand – just as Olympic tickets are. The question then becomes: how fair is it that VANOC has a broader official marks argument available to them in stopping ticket scalping, but the Vancouver Canucks cannot make the same argument on what are almost identical situations?
Consumer Protection and Ticket Speculation
I hope not to leave the impression that I don’t support VANOC’s efforts here. Their public-interest and consumer protection rationale for pursuing this lawsuit seems well-based. This is especially so for an event like the Olympic Games where so much national pride and patriotism is at stake. The public deserves to have a fair shake at attending these events and VANOC is trying to achieve that.
My criticisms are leveled at the hijacking of the official mark protection for use in a way that renders it unfair. It warps the purpose for which official marks protection exist, and makes the OPMA seem even more like an unfair piece of special-interest legislation.
This lawsuit is ultimately about two things: (1) consumer protection from fraudulent ticket vendors and (2) a broader societal disdain for ticket scalpers. Instead of contorting Official marks legislation to achieve its aims, VANOC should address the ticket scalping problem by lobbying the BC legislature for laws prohibiting scalping. This is the more appropriate avenue because it leaves the integrity of official marks legislation intact, and provides a more equitable application of the law for all British Columbian event organizers (not just VANOC).
One Response
VANOC’s statement of claim against Coast2Coast Tickets, and its owner, Shane Bourdage (S-092032), filed March 17 in BC Supreme Court by Bradley J Freeman of Bordern Ladner Gervais, takes 12 pages to carefully detail VANOC’s rationale for suing.
While it mentions the Olympic & Paralympic Marks Act and alleges the defendants are using them to give the public the impression it’s authorized to use VANOC’s marks, it’s main contention is that it has a legal chain of possession over its tickets through agreements it’s signed with each of its distributors and that it can cancel tickets if they are sold by those unauthorized to possess them at higher than their face value — unless that happens through its own distribution network.
It says that since the defendants aren’t approved sellers or distributors, they’re alleged to either have breached contracts, or ‘knowingly, and intentionally aided, assisted, participated in, and benefited from those breaches of contracts.”
None of this, of course, has yet been proved, and, as of today, a Statement of Defense has not yet been filed.
Beside the specifics of the suit, VANOC, to its credit, I think, has taken some considerable pains over the last few years to point out that it’s main issue is protection from brand dilution, by holding meetings with key stakeholders, including groups of artists, across the country to illustrate where its boundaries are.
It also has, on its website, a lengthy section for the public and business to see how it assesses potential for infringement, with specific illustrations of what is considers fair and unfair use of its brands. That’s located at a lengthy URL, which I’ve shortened to:
tinyurl.com/4cornb
Mr. Pearlman comments on a Vancouver pizza place which has used Olympic trademarks with impunity for decades, without IOC or Canadian Olympic Committee comment (as if, somehow, that squatter’s rights attach), but VANOC has itself said it would ignore (or grandfather, if you will), any such use if they occurred before 1998, which is when VANOC’s predecessor, the Vancouver 2010 Bid Corporation, was established. thus taking that particular example off the table.
/ Peter Morgan
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