In The Spirit Of Fair Play: A Primer On IP And The Olympics02/08/2012 by Daria Kim for Intellectual Property Watch 2 Comments Print This Post Mapping out intellectual property issues related to the Olympic Games may itself constitute an engaging exercise: trademark and design protection of the Olympic indicia; data protection of Games results; personality and publicity rights associated with sports celebrities; character rights subsisting in the Olympic mascots; unfair competition law and other legislative means to address ambush marketing and secure the interests of the Games’ exclusive sponsors. The latter appears essential for the purpose of securing the means for staging the Games and sustaining the Olympic Movement. The Olympic Charter [pdf] promulgates the fundamental principles of the Olympic Movement such as promoting the “balanced whole of the qualities of body, will and mind” and the “respect for universal fundamental ethical principles.”A comprehensive legislative framework exists to protect the standards and ethical principles of the business conduct related to the Olympic Games, which mean compliance with the rules regulating the rights to the Olympic properties.The Subject Matter of ProtectionA note on terminology: as provided under the Olympic Charter, the Olympic properties comprise the Olympic symbol, flag, motto, anthem, identifications, designations, emblems, flame and torches.Furthermore, the Charter defines the Olympic designations as “any visual or audio representation of any association, connection or other link with the Olympic Games, the Olympic Movement, or any constituent thereof.”While the scope of protection for some Olympic indicia, such as the symbol, flag, motto, and emblem have more or less specific contours, the protection of the Olympic designations may appear almost boundless, given the degree of the Olympic brands recognition and the ease with which an incidental association can be triggered.The Exclusive Right HolderAll rights to the Olympic properties “including but not limited to the use for any profit-making, commercial or advertising purposes” belong exclusively to the International Olympic Committee (IOC). Any sponsors, broadcasters, merchandisers, non-governmental organisations or others wishing to use the Olympic properties need to obtain the IOC’s authorisation by concluding a licensing agreement.The IOC “retains exclusive and final authority, including the determination of the OCOG’s [the Organizing Committee for the Olympic Games formed by the National Olympic Committee of the host country] share of revenues, including from all broadcast and television agreements world-wide and the international sponsorship program” (see Manual for Candidate Cities, pdf).As provided under the Charter, when the use of the Olympic properties is licensed by the IOC, the NOC shall receive part of the net proceeds deriving from such exploitation, which amounts to “half of all net income from such exploitation, after deduction of all taxes and out-of-pocket costs relating thereto.”Rationale for ProtectionThe primary rationale for the rigorous protection of the Olympic brand is to secure the funding source for staging the Games and further development of the Olympic Movement coming from the sponsorship programmes. As IOC President Jacques Rogge stated, “We have to protect the sponsors because … without sponsorship there are no Games.”When the Olympic Symbol was designed in 1912 by Baron Pierre de Coubertin, likely it could not be envisaged at that time that over a century the symbol would turn into one of the most recognisable global brands, whose value would be estimated in multi-digit numbers. (For instance, The Guardian reported the value of the Olympic brand, the most recognisable brand of Greek origin, to be “worth £30.8bn, 134 times more than the National Bank of Greece.”)When estimated in damages for rights infringement, the Olympic brand value was assessed in the amount of 14,890,000 RMB paid in damages and 8,380,000 RMB in fines for 1,128 Olympic symbol-related infringement cases in the course of the staging of the Beijing Games from 2004 to 2006.Understandably, while the athletes from all over the world compete under the motto ‘Citius, Altius, Fortius’, the world’s most powerful companies fight for the right to be associated with the grandiose sporting show, and to receive faster and higher returns on marketing investments derived from the stronger brand recognition.The IOC manages The Olympic Partner (TOP) sponsorship programme that channels the licensing revenues to cover the Olympics’ organisational costs. (The list of London 2012 sponsors is here.)Sponsorship attributes to 45 percent of the total revenue generated from the programmes managed by the IOC and the OCOG within the four-year Olympic cycle.Ambush Marketing as Major ConcernThe phenomenon of free-riding in the context of the Olympics is ambush marketing. The term, attributed to be coined by Jerry Welsh, a former marketing director at American Express, originally did not bear negative implications. As explained by Welsh [pdf], ambush marketing “correctly understood and rightly practiced, is an important, ethically correct, competitive tool in a non-sponsoring company’s arsenal of business – and image-building – weapons.”Nowadays, in the context of the Olympic Games, ambush marketing is understood to be any attempt to create a false unauthorised association with the Games, and is believed to be detrimental to the interests of the official partners, broadcasters, licensees and non-commercial organisations of the Olympic Movement, who “possess exclusive commercial rights of the official marketing partners” and are “allowed to suggest an affiliation with the Olympic Games” under the terms of licensing agreements” (IOC Marketing Report Vancouver 2010, pdf).Moreover, ambush marketing is compared to “cheating” that “causes damage to the Olympic Movement by devaluing the Olympic brand” (see IOC Marketing Media Guide Beijing 2008, pdf).Examples of Ambush MarketingCompanies get inventive when it comes to the opportunity to reach out to the Olympics audience.In the case NZOCG v. Telecom NZ (1996) 35 IPR 55, also known as the ‘Ring Ring’ case, Telecom New Zealand launched an advertising campaign using the visual image, in which the words ‘Ring’ were depicted in the same color gamma and order mimicking the Olympic rings. (The official sponsor of the New Zealand Olympic team that year was the competitor’s company Bellsouth.)The New Zealand Olympic Association (NZO) sought an injunction claiming that NZ created the false association of sponsorship of the Games.However, the court ruled in favor of the defendant and concluded that it would be a too far stretch to assume that the marketing campaign of Telecom NZ implied its official sponsorship, and an average newspaper reader would not be misled by the advertisement.Another example of marketing specialists’ creativity: in 1996 Coca Cola was the official sponsor of the Summer Olympic Games in Atlanta, and Pepsi sponsored French track athlete Marie-José Perec. When Perec won gold medals, in the advertisement published in L’Equipe, one of the leading French sports newspapers, Pepsi referred to her as the “official representative of an unofficial drink in Atlanta.”Protecting ExclusivityGiven the exclusivity imperative of the sponsorship model, the IP rights serve as the appropriate legal instrument to secure the monopoly position of the official sponsors.At the international level, the Olympic Symbol is protected under the Nairobi Treaty on the Protection of the Olympic Symbol adopted in 1981. Its contracting parties undertake the obligation to “refuse or to invalidate the registration as a mark and to prohibit by appropriate measures the use, as a mark or other sign, for commercial purposes, of any sign consisting of or containing the Olympic symbol, as defined in the Charter of the International Olympic Committee.”At the national level, a range of laws exist to protect the Olympic properties. Various regimes of protection, i.e., trademark, design rights, copyright, unfair competition, and event-specific legislation, overlap like the interlaced rings of the Olympic Symbol itself. (More on the interplay between trademark, copyright, design, and other laws protecting the Olympic brand in the context of London 2012 here).Upon the selection, the host cities undertake the obligation to ensure that domestic law provides adequate protection for the Olympic properties. In their bids, candidate cities are required to: “describe the legal measures in force to protect the Olympic symbol, the emblems, logos, marks and other Olympic-related marks and designations”; provide a governmental declaration “stipulating that all the necessary legal measures will be taken to facilitate the protection of Olympic marks”; and “ensure that there are effective controls in place to avoid/prevent ambush marketing” (see Manual for Candidate Cities, pdf).Olympic-Specific Legislation and Sui Generis Right of AssociationIn its bid to host the London Games, the UK government guaranteed to enact the new legislation to enhance protection of Olympic and Paralympic emblems, marks, logos and mascots, and “to set up a Brand Protection Task Force to control outdoor advertising and eliminate ambush marketing” (see the Report of the Evaluation Commission, page 70, pdf).The London Olympic Games and Paralympic Games Act 2006 [pdf] introduces the sui generis right – the London Olympics association right, which provides for the infringement for the contextual, or associative, reference to the Olympic property and creating false and misleading association with the Games.Under the Act, “the concept of an association between a person, goods or a service and the London Olympics includes, in particular – (i) any kind of contractual relationship, (ii) any kind of commercial relationship, (iii) any kind of corporate or structural connection, and (iv) the provision by a person of financial or other support for or in connection with the London Olympics.” (See Schedule 4, London Olympics Association Right, 1 (2) (a).)The Act lists two groups of expressions; the use of any two expressions from list A, or any expression from list A in combination with an expression from list B, would constitute the infringement of the association right. List A includes expressions (a) “games”, (b) “Two Thousand and Twelve”, (c) “2012”, and (d) “twenty twelve”.List B consists of expressions (a) gold, (b) silver, (c) bronze, (d) London, (e) medals, (f) sponsor, and (g) summer.The scope of the association right was recently tested in a dispute between the London Organizing Committee of the Olympic and Paralympic Games (LOCOG) and Party Pieces. In the run-up of the London 2012, the Party Pieces, a party supplies company, offered on its website over 100 items under the ‘Celebrate The Games’ banner (including, for instance, a ring toss game and multicolored paper chains in the Olympic colors).As reported by the Guardian, after the investigation, a LOCOG spokeswoman announced that “there are no infringements and the products are fine. We may ask them to make a very minor change” to their website. The dispute, however, stirred public debate (e.g., 460 comments on a Daily Mail article).Balancing ExerciseThe Olympics-related legislation, in particular, the introduction of the exclusive association right, has been criticised as an abuse of the freedom of commercial speech, i.e. the government attempts to impose tight regulations on marketing campaigns by forbidding the use of generic terms, such as those listed in the Act, in companies’ advertisements.For example, in a recently published book on “Ambush Marketing & the Mega-Event Monopoly: How Laws are Abused to Protect Commercial Rights to Major Sporting Events,” author Andre M. Louw takes a critical stance on “the phenomenal expansion of IP laws” in the context of the sports mega-events, which he views as “illegitimate and unjustifiable.”In the context of the IP rights protection, this seems to be a common controversy, revolving around whether the trade-off between exclusive right holders’ monopoly is sufficiently balanced with public interests.Related Articles:IP Scores High In Sports – Supports Amateurs, Olympics, Development, Speakers Say Sports Federations Keep Up Defence Against Possible IP Infringers Trademark Protection, Broadcast Rights Vital For Sports, Say Stakeholders Daria Kim may be reached at email@example.com."In The Spirit Of Fair Play: A Primer On IP And The Olympics" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.