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Ambush marketing in the Olympics and rule 40 – does it really deter big brand owners?


6th Sep 2016

The Olympic Games officially kicked off in Rio almost a month ago amidst controversial political and health concerns surrounding the event. The privilege of associating oneself with the Olympics is only within reach of a select few. For approximately a month, many companies, primarily athlete sponsors, were forced to remain ‘in silence’ about the Olympics because of Rule 40 of the Olympic Charter. The International Olympic Committee (IOC) and the US Olympic Committee (USOC), amongst many other National Olympic committees, are entirely privately funded. The IOC receives a considerable amount of funding through global sponsorship, contributing to 45% of IOC marketing revenues1, the second biggest source of revenue after broadcasting rights. Roughly 90% of the IOC’s revenue is distributed amongst National Olympic Committees (NOCs) and is used to cover expenses for hosting the Olympics2. The vast sums of sponsorship money going in for just a 16 day quadrennial event urge the IOC and other committees to protect and grant exclusivity of Olympic trade marks to its main broadcasting and marketing partners. This is when meticulous measures to defend the marks are employed to tackle the threat of ambush marketing, where a third party attempts to create a direct or indirect association with the Olympics. After being elected to host the Olympics, specific national legislation was adopted in Brazil to locally eradicate ambush marketing. However, everywhere else, the IOC and USOC would need to resort to ordinary trade mark legislation to enforce Rule 40 if a dispute was not solved by traditional means.

The tipping point for this committed protection of Olympic IP started after Michael Johnson wore eye-catching gold Nike shoes during the 1996 Atlanta Olympics. Nike had also set up a ‘Nike Centre’ right next to the athletes’ village, distributed branded flags to fans and ran some questionable ad campaigns on the side. And Nike was not even an Olympic sponsor. A few days later, Johnson also appeared on the cover of TIME magazine with the gold Nike shoes dangling from his neck with his gold medals. Reebok, an official Olympic sponsor at the time, accused Nike of ambush marketing and the IOC realised that it was time to tighten the rules.

The ‘blackout’ period lasted from 27 July until 24 August 2016 where non-official Olympic sponsors are not permitted to falsely associate themselves directly or indirectly with the Olympics. During this ‘blackout’ period, NOCs patrol all marketing outlets, under the provisions of bye-law 3 of Rule 40 of the Olympic Charter3: “Except as permitted by the IOC Executive Board, no competitor, coach, trainer or official who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games.” Breaching Rule 40 can have serious consequences for both the sponsor and the athlete, who could even be threatened with disqualification from the Olympics or medal revocation under Rule 594. However, it was not until the eminent impact of social media on the London 2012 when the public became more familiar with Rule 40 and the commitment of NOCs, particularly the British Olympic Association (BOA), to preserving Olympic Intellectual Property. Before London 2012, Rule 40 violations popped up from time to time but were not as common. Commercial entities posting social media messages, which includes tweeting and re-tweeting, and images of Olympic participants containing any Olympic trade mark registrations of word marks such as ‘Olympic’, ‘Olympian’, ‘TeamUSA or GB’, ‘Go for the Gold’, ‘Road to Rio’ and ‘Rio 2016’ without authorised permission from the Committee are now to be considered a violation of Rule 40. US and UK trade mark legislation require the use of the a registered mark ‘in commerce’ (US law) or ‘in the course of trade’ (UK law) for an act to constitute an infringement. Many may argue that certain uses of Olympic marks fall outside of the scope of the ‘use in the course of trade’ requirement and others, mainly IOC and official sponsors of Rio 2016, would certainly differ. A US Supreme Court decision San Francisco Arts & Athletics, Inc vs. USOC confirmed that most unauthorised commercial uses of Olympic trade marks constitute a likelihood of confusion.

National law, such as section 4(5) of the UK Trade Marks act, grants registration exclusivity of such marks to only Olympic organisations to avoid abuses from third parties. This stops individuals from stockpiling city + year related registrations and domain names in bad faith. To this extent, the USOC currently has 191 registered trade marks in the US, six of those relating to the big sporting event of 2016 where the Rio 2016 mark is the most important one, especially on social media platforms. This renders the USOC as one of the key enforcers of the Olympic trade mark monopoly.

The IOC and the USOC have demonstrated that the rules apply to everyone. Individual tweets and Twitter accounts with any sort of non-official association with the Olympics were swiftly taken down both in 2012 and 2016. Olympic Gyro, a small food establishment in Philadelphia, had to rebrand to ‘Olympia Gyro’ in 2013 after being approached by the USOC. Other smaller entities such as athletic apparel company Oiselle congratulated their sponsored runner Kate Grace after winning in the July 2016 US Olympic trials by posting a photo on Instagram. The USOC discovered this and Oiselle were shortly told to remove the post. During the 2016 ‘blackout’, bigger companies such as New Balance, Saucony and Under Armour were also forced to keep quiet on social media about their sponsored athletes. Creative ways were employed to thank sponsors or to congratulate athletes. For example, US athletes Emma Coburn and Jenny Simpson indirectly managed to get New Balance some media attention in Rio 2016 by celebrating their bronze medals with their sponsor’s shoes hanging around their shoulders. Back in 2012, BEATS (also non-official sponsors) gave headphones to high-profile Olympians and successfully gatecrashed London 2012. However, in Rio 2016, the USOC picked up on this and forced Michael Phelps and other athletes to conceal any BEATS logos on their headphones.

After the public outcry, especially from athletes, prior to London 2012, the BOA had announced changes for the recent Rio 2016 that relaxed Rule 40 restrictions by providing a narrow route for non-official sponsors. This route allows non-official sponsors to advertise and use an athlete’s image during the ‘blackout’ period. In any case, reference to any Olympic Intellectual Property would still not be allowed. Virgin Media took advantage of this route to run their marketing campaign with Usain Bolt during the Olympics. To benefit from the relaxed Rule 40, they had requested approval from the BOA and the Jamaican Olympic Committee before the end of January. They were also required to launch their approved ad before 27 March in order to comply with the new IOC guidelines. More information on Rule 40 waiver applications can be found here.

Overall, Rule 40, and its enforcement by Olympic committees, has proven to be highly effective in fighting ambush marketing. Undoubtedly, marketing regulations have toughened to successfully reduce ambush marketing since the Atlanta 1996 but big non-official Olympic brands still strive to associate themselves to the Olympics without infringing the rules and paying for sponsorship. In response, Rule 40 was modified to include provisions to permit some marketing activities from non-official sponsors during Rio 2016 and future ‘blackout’ periods.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

Author
Joshua Parsi
Associate
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Would you like to know more? You can talk to Joshua Parsi who will be able to help. Call +44 (0)20 7242 0901

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