Olympic Games: Trademark Revenues Are High Stakes

With a budget of over 2 US$ billion, the Brazilian Olympics rely heavily on commercial sponsors and licensing for revenue. Protecting the Olympic symbols is thus an imperative for the games with stringent rules on the use of those symbols and related signs. However, the fame of the event also draws covetousness from a variety of commercial actors seeking free rides, which is a dangerous endeavour, according to legal sources. Brazil adopted special rules for the occasion, while in the United States the protection is particularly stringent.

According to guidelines for brand protection [pdf] issued by the Rio 2016 Organising Committee for the Olympic and Paralympic Games, the budget for the organisation of the Rio 2016 games is about Brazilian real 7 billion (about US$2.2 billion). The funding is drawn from private sources in the form of sponsorship, ticket sales, and contribution from the International Olympic Committee (IOC).

According to the organising committee online budget, 40 percent come from local sponsors, 25 percent from IOC contribution, 16 percent from ticket sales, 12 percent from international sponsors, and 7 percent from licensing and other revenues.

The success of the games depends on the support of commercial partners, which acquire sponsorship quotas, licensing and concessions, and are thus entitled to associate their brands, products and services with the Olympic and Paralympics brands, as well as with that of Rio 2016, the guidelines say.

The 1981 Nairobi Treaty on the Protection of the Olympic Symbol administered by the World Intellectual Property Organization protects the Olympic symbol (five interlaced rings) against use for commercial purposes, such as in advertisements, on goods, and as a mark, without the authorisation of the IOC, in the 52 countries [pdf] signatories to the treaty.

The intellectual property of the games include logos, symbols, images, videos, official expressions, anthems, and songs. The main symbols are the rings, the motto, and the flame.

The motto is “Altius, Citius, Fortius,” Latin for “Higher, faster, stronger.” Expressions include “Rio 2016 Games”, “Rio 2016,” “Rio Olympiad,” as well as variations and translations.

According to the guidelines, it is forbidden to use the Rio 2016 brands as a theme or focus “for any kind of promotion, competition and/or lottery draw in a manner that might create a direct association with the Games.” For example, “countdown clocks or other devices/applications that perform the same function” are not allowed, “because the exclusive rights to such are held by Omega, the Game’s international sponsor.”

The list of sponsors is here.

Rule 40, Ambush Marketing

Rule 40 of the Olympic Charter [pdf] includes a section stating that “Except as permitted by the IOC Executive Board, no competitor, team official or other team personnel 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.”

This, according to the guidelines, helps to prevent ambush marketing campaigns by companies that do not have official rights.

“Ambush marketing is characterised by any intentional or unintentional attempt to create a false, unauthorised commercial association with a brand or event, in this case Rio 2016 and the Olympic and Paralympic Movements,” the guidelines state. “To use a common phrase, it equates to ‘jumping on the bandwagon’ of publicity generated by the event without paying anything for the privilege of doing so.”

The use of athletes’ images is among the most commonly used of ambush marketing, according to the guidelines.

According to McDermott Will and Emery partners, one such case is unfolding right now. One of the non-official sponsors, athletic apparel brand Oiselle, which sponsors Olympian runner Kate Grace received a letter from the US Olympic Committee after Oiselle posted messages on social media congratulating Grace on winning the 800m race that qualified her for the Rio Olympics. Oiselle, according to the lawyers, received demands to take down messages and photos from those posts, and to stop all Olympic-related advertising.

Call for Temporary, Balanced Olympic IP Rules in Brazil

According to a July post from Isabel Boardman, from Veirano Advogados in Rio, published on the International Bar Association website, the Olympics create a situation whereby organisers and sponsors pursue measures to protect their rights. Meanwhile local businesses which are non-sponsors seek means to associate their products and activities to the event in a way that may lead to unauthorised advertising and undue associations, which can be defined as ambush marketing.

Brazil enacted special legislation in cooperation with the IOC, the International Paralympic Committee, the Rio 2016 Organising Committee and the Brazilian Trademark Office, she said.

The 2014 football World Cup served as a guide for the Brazilian authorities to create the Olympic Act (Federal Law No 12,035/2009 – Olympic Act of 2009), setting up dedicated rules, including infringement issues for the games 2016.

The Olympic Act is a summarised law, said Boardman, and on 6 October 2015, the Executive Branch of the Brazilian government presented Law Bill No 3,2221/2015 to specifically regulate activities related to the Olympics, such as the special temporary protection of the organisers’ registered trademarks and related symbols, names and distinctive signs, which will have famous status until 31 December 2016.

According to Boardman, “the Law Bill has already been approved by the House of Representatives and is pending approval by the Senate in order to become a Federal law.”

On 19 January 2016, the Brazilian Trademark Office issued a technical note prohibiting non-authorised third parties from misappropriating and misfiling expressions, symbols and abbreviations related to the Olympic games, such as “Jogos Olímpicos,” and “Rio Olimpíadas.”

“These specific regulations to protect the Olympics, the organisers and its sponsors could be considered as restrictive in view of the non-sponsor local businesses. However, the competent authorities should bear in mind that the relevant legislation must be limited in time and reasonably balanced in respect to the rights of competition and free initiative guaranteed by the Brazilian Federal Constitution in order to avoid risk of abuse and overreaching,” Boardman said.

The fact that Brazil is the host of major events such as the Olympics raises awareness about intellectual property issues and contributes to educating people about the significance of protecting immaterial rights and the legal consequences of infringement, she said.

This rule intends to prevent ambush marketing by companies that may sponsor teams and/or individual players but are not an official sponsor, as occurred, for example, with Adidas, an official sponsor of the 2014 World Cup, when the Brazilian soccer player Neymar took his shirt off at the end of a match and, accidentally or not, revealed part of his underwear disclosing the brand Blue Man, owned by a Brazilian swimwear and underwear company that unduly used this image to promote its products and trademarks on its Facebook page.

Beware Olympic Trademarks, US Law Stringent

A new post by Po Yi, former chief advisor on marketing and sponsorship issues for major brands, and Jessica Borowick, a Venable associate, warns brands against the risks of using Olympic trademarks, because “of the relative ease with which Olympic rights holders, such as the United States Olympic Committee (USOC), can take legal action.”

Under the Ted Stevens Amateur Sports Act, the USOC has exclusive rights to use “Olympic,” “Olympiad,” the interlocking rings, event mottos and other Olympic trademarks, they said. The biggest difference between Olympic trademarks and other trademarks, the post said, is that in order to protect Olympic trademarks, the USOC “does not have to prove that a contested use is likely to cause consumer confusion.”

In a previous post, the two lawyers said companies and organisations might be tempted to use the “Games” or the “Olympics” to promote their products, services and agendas. However, that might prove to be a dangerous lure.

Even referring to the Olympics in marketing is a minefield for sponsors and non-sponsors alike for three main reasons, they said.

“The USOC can bring a civil action against anyone who uses an Olympic trademark in a way that tends to cause confusion of falsely suggests an association between any Olympic or Paralympic activity and that user without proper consent,” the lawyers said.

Even Olympic sponsors must beware of exceeding the scope of their respective licenses, using the trademarks without first obtaining approvals from the USOC, and infringing the rights of third parties, such as athletes or other Olympic sponsors, they said.

Finally, the USOC, the International Olympic Committee and each sport’s National Governing Body “are extremely protective of their rights…. They police and enforce their rights aggressively and they are very effective in finding and stopping potential infringers.”