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Olympics Newsletter - London 2012 and the protection of exclusive rights - a powerful tool for sponsors, a legal minefield for the rest

This article sets out the legal protections which have been put in place to protect the Olympic brand and provides an analysis of the protections that these exclusive rights offer, how these could be infringed and what defences may be available.

 
1. Introduction
    The Olympic Games are nearly upon us, and businesses, brand owners and charities are all hoping for a much needed lift on the back of the huge influx of visitors soon to descend on the capital, and across the country more widely. However, according to a former vice president of the International Olympic Committee (IOC), many companies and brands do not understand the restrictions on use of the Games to benefit their business, and lack a strategy for how they will promote their brand during the Games.
     
    This is in part due to the lengthy rules governing the use of Olympic references in advertising and brand promotion. These rules have been put in place to protect official sponsors’ exclusive promotional rights and go much further than the intellectual property rights used by other rights holders to protect non-Olympic words and terms from unauthorised exploitation.

     
    2. Background to the legislation
     
    The current range of legal restrictions arose in part as the IOC’s answer to the growing practice of ‘Ambush marketing’ which has become a familiar feature of major international sporting events. This is the practice of unofficially associating your brand with an event without paying the sponsorship fees to do this through official channels.  Infamous examples include Nike’s flooding of Atlanta with its advertising during the 1996 Games, saving the $50 million sponsorship fee in the process. By the end of the 1996 Games, many believed Nike was an official sponsor and the IOC’s credibility took a huge hit as a consequence.
     
    In an effort to shore up its ability to charge lucrative fees from sponsors, the IOC began enacting a series of rules, obligations and penalties on host countries.  Since the Sydney games of 2000, the IOC has required bidding governments to commit to introduce bespoke legislation offering protection to the Games. On winning the London 2012 bid, London was immediately required to enter into the “Host City Contract”, forcing the implementation of the London Olympic and Paralympic Games Act 2006 (the “2006 Act”) which established specific rights in respect of the London Olympics.

     
    3. The London Organising Committee of the Olympic Games
     
    The London Organising Committee of the Olympic Games (“LOCOG”) is the body which holds rights in the London Olympic Games, and is also the body responsible for organising and staging the Games. LOCOG is a limited liability company and receives the majority of its revenue from the private sector, whether through sponsorship, ticket sales, sale of merchandise, or sale of advertising and broadcast rights.
     
    Any decision as to whether an infringement of LOCOG’s rights, in relation to the Olympics, has actually taken place is taken by the courts, with LOCOG being the party bringing the case against the alleged infringer.
     
    LOCOG’s rights in the Olympics are principally the Olympic Association Right (“OAR”)[1] and the Paralympic Association Right (“PAR”)[2], the London Olympic Association Right (“LOAR”)[3], registered trade marks and design rights, and advertising and trading restrictions imposed on third parties.[4]
     

    4. The exclusive ‘Olympic rights’
     
    The OAR was introduced by the Olympic Symbol etc. Protection Act 1995 (the “1995 Act”), as amended by the 2006 Act. The 2006 Act also introduced the PAR, which extends the right in the OAR to the Paralympic games. The OAR and PAR confer “exclusive rights in relation to use of the Olympic Symbol, the Olympic motto and the protected words”, where these are used without consent of the proprietor.
     
    The LOAR was introduced by Schedule 4 of the 2006 Act and grants exclusive rights in relation to any representation which is “likely to suggest to the public that there is an association between the London Olympics” (emphasis added) and a person, or the goods or services provided by that person.  ‘Association’ is not explicitly defined by the Act and therefore has an extremely wide potential reach. The legislation gives some examples of what could amount to ‘association’, including an implication of a contractual or commercial relationship, of a corporate of structural connection or that financial or other support has been provided by a person.

     
    4.1 Interpretation of ‘Association’: Contrast with trade mark law
     
    Trade mark law also recognises a concept of ‘association’. A party can infringe a registered UK or EU trade mark where it uses a similar mark to the registered trade mark in a way which results in a ‘likelihood of confusion which includes a likelihood of association.  However, courts have held that there is no infringement if the use of a similar mark could suggest an association, but would not confuse the public.[5] By interpreting the statute in this way the Courts made it clear that mere association would not amount to infringement.
     
    There is no requirement in the 2006 Act that the alleged infringer of the LOAR has confused the public, only that the representation suggests an association with the London Olympics. It is possible that courts could rule that for a likelihood of ‘association’ to exist there must be some confusion in the mind of the public as to whether the alleged infringer is connected to the London Olympics, i.e. a similar interpretation to that used when considering trade mark infringement.
     
    However, this seems unlikely that the courts would interpret the legislation in this way; legislators have chosen not to follow trade mark law by referring to ‘confusion’ and instead have used the term ‘association’. It therefore seems that parliament intended the LOAR to provide a wider protection than trade marks offer.
     

    4.2 Infringement
     
    Infringement of the OAR/PAR
     
    The OAR and PAR are narrower in scope than the LOAR; infringement takes place where the specific protected words and symbols set out in the legislation are used (called a “controlled representation”).[6]
     
    Controlled representations include the respective symbols of the IOC and the International Paralympic Association (IPC), the Olympic and Paralympic mottos, the words ‘Olympic’, ‘Olympian’ and ‘Olympiad’ (and Paralympic equivalents), and anything similar to these likely to cause an association with a controlled representation or with the Games or the Olympic movement.
     
    The OAR/PAR are not infringed however if the use of the controlled representation would not in fact be likely to cause an association between a person, product or service and the Olympic Games or Olympic Movement.[7] ‘Association’ is defined in a similar way as it is under the LOAR.
     
    Infringement of the LOAR
     
    The LOAR is infringed where a person makes a representation likely to suggest to the public that there is an ‘association’ (as discussed above) between the London Olympics and a person or the goods or services provided by a person in the course of trade.[8]
     
    The 2006 Act sets out a list of listed expressions which a court “may take account of” when assessing whether an ‘association’ has been created.[9] The listed expressions are wide ranging and include seemingly innocuous terms such as ‘summer’ and ‘games’.  Unlike the OAR / PAR, use of these expressions (or something similar) is not necessarily required and the absence of these listed expressions does not prevent a finding of infringement. The question is always whether the representation made by the defendant would be likely to suggest an association with the Olympics.
    LOCOG has given guidance as to the words or depictions which in its opinion could imply an association with the London Olympics. These include the depiction of Olympic venues, use of the five Olympic colours, use of a torch/flame, and more extreme examples, such as use of words associated with Olympic qualities (spirit, endeavour etc.) or references to XXX or 30 (this being the 30th, or XXX Olympics). These examples are not included in the legislation itself and it may well be that the courts would not interpret the legislation quite so far in LOCOG’s favour.
     
    Practical aspects to infringement
     
    LOCOG is a large and well-resourced organisation. In practice, businesses on the receiving end of a cease and desist letter may prefer to make changes to their advertising rather than challenge LOCG’s rights through litigation.  It is therefore questionable whether LOCOG’s interpretation of its rights will be challenged in the courts in the near future.
     

    4.3 Defences
    The 1995 and 2006 Act provide the following defences to defendants accused of infringement of the LOAR/OAR/PAR:[10]
     
    • Honestly made statements will not amount to infringement where the statement accords with “honest commercial or industrial practices” and only incorporates Olympic references into contexts in which they are relevant.  LOCOG has provided guidance as to situations in which it may be persuaded that the reference was honestly made. Relevant considerations would include:
    - whether the statement is in fact true or accurate;
    - whether, despite such truth, the statement has been used in a context which could cause confusion, misunderstanding or mislead viewers into believing a commercial connection exists between the advertiser and the Games;
    - whether the advertiser has taken unfair advantage of the value of the Games; and
    - whether the Games were in fact relevant to the context.
     
    LOCOG will not consider representations to be honest where the relevant element is ‘gratuitous or unduly emphasised’, for example where the text referring to the games is in a larger font, or is otherwise highlighted. 
    • Journalistic references made solely for the purposes of publishing or broadcasting a report on, or information regarding, the Olympics, are also allowed.  However, the defence does not allow advertisers to ‘piggyback’ on the Games by publishing advertising material alongside a news report, for example by sponsoring the report itself; nor will LOCOG allow ‘advertorials’ dressed as news reports.
    • Incidental uses of references to the Games, in accordance with the Copyright Designs and Patents Act 1988, are also allowed. The court will apply applicable copyright principles when determining whether the use is incidental, such as whether the use is fleeting or insubstantial and whether any commercial advantage is gained from the use. This defence is likely to be of limited application.
       
    • Legacy rights are also protected; businesses which have used Olympic references or symbols (either as unregistered or as registered rights) before the introduction of the relevant right (1995 for the OAR or 2006 for the LOAR/PAR) may continue to do so.
    The 2006 Act also contains several defences which only apply to the LOAR; the LOAR is not infringed by the use of a person’s own name or address, the use of indications of the characteristics of goods and services, or in respect of representations which are necessary to indicate the intended purpose of a product or service. In each of these cases, the use must be in accordance with honest industrial or commercial practices.
     

    4.4 Penalties for OAR/PAR/LOAR Infringement

    Both civil and criminal penalties can potentially attach to infringement of the OAR/PAR/LOAR.
     
    Civil penalties
    The OAR/PAR and LOAR are intangible property rights; therefore the same penalties which would be available for infringement of an intellectual property right are available on a successful claim by LOCOG, including damages, an account of profits, injunctions, orders for delivery-up of offending assets, erasure of offending signs and/or disposal.
     
    Criminal penalties
    Infringements of OAR/PAR can also result in various criminal sanctions. For example, if a person with a view to gain for himself or another, or with an intent to cause loss to another (e.g. an official sponsor) and without the necessary consent, applies a controlled representation to goods or packaging he can be liable on summary conviction for a fine of up to £20,000 and conviction on indictment to a fine of any amount set by the court.[11]
     
     
    5. Trade marks and Design Rights
     
    In addition to the unique Olympic rights, LOCOG also holds a large number of trade mark and design right applications and registrations in respect of the Games. Some of these are registrations one would expect LOCOG to have filed (such as the official logo of the Games). Some however go much further; for example, LOCOG has registered several designs which purport to cover the entire ‘London Olympics’ font.
     
    These rights could be enforced against third parties through an action for trade mark/design right infringement.
     

    A screen print showing some of the design rights registered by LOCOG
     
    6. Other ways in which LOCOG is protecting ‘Olympic rights’ for sponsors
     
    As well as using the above rights to clamp down on unauthorised advertisers, LOCOG has various other tools at its disposal.
     
    The London Olympic and Paralympic Games (Advertising and Trading) Regulations 2011[12] (in English, Scottish and Welsh varieties), restrict advertising activity in certain restricted ‘event zones’ (mainly the vicinity of Olympic venues and iconic buildings) between late-July and early September 2012.  The Regulations appear to be based on past experience of ambush marketing, and include prohibitions on arranging for advertising to take place (for example by handing branded clothing to spectators entering event zones), the flying of banners over restricted zones, and even prohibit advertising painted onto flesh or attached to animals.
     
    The Regulations also prohibit non-authorised persons trading in restricted zones during an event period; this is directed at street traders.
     
    The IOC are clamping down on the use of social media in the games; athletes whose tweets are deemed to include commercial activity could be disciplined and even banned from the games, whilst Twitter has agreed to work with LOCOG to prevent non-sponsors from buying certain hash tags which imply an association with the games.
     
    The IOC also owns the copyright in the Games’ footage.  LOCOG has indicated that it will not seek to prevent pubs and other venues showing live televised footage of events; however it will take action if the venue advertises that it is showing coverage of the Games in a way which implies an association with the Games. However, it remains likely that footage uploaded to the likes of YouTube will be taken down quickly, and LOCOG has not ruled out seeking to prevent spectators posting photographs to their Facebook accounts .


    7. Comment
     
    Following the success of ambush marketing tactics during the last twenty or so years, the Olympic organisers have implemented tight rules governing the use of the Olympic brand. Commercial reality dictates that sponsors’ rights must be protected if the Olympics are to continue to attract the investment needed, hence the enhancement of the exclusive rights beyond traditional intellectual property law. However, there is a risk that the complexity introduced as a result will prevent many small businesses from capitalising, in a legitimate manner, on the Games, which are after all intended to bring an economic lift to the whole country and not just large corporate sponsors.
     
    For further info, contact Peter Dalton, IP & Litigation Associate

    For practical advice as to the kind of statements / advertising which should be acceptable (and the types of advertising which definitely would not be) please look at our note Socialympics
     
    [2] Section 5A, Olympic Symbol etc. (Protection) Act 1995
    [3] Para. 1, Schedule 4 London Olympic Games and Paralympic Games Act 2006
    [5] Section 5(2) Trade Mark Act 1994  / Article 8(1)(b) Regulation (EC) 207/2009)  state that a registered UK or EC trade mark respectively is infringed where there is a likelihood of confusion, and this includes a likelihood of association; Sabel v Puma (Case C-251/95 [1997] ECR I-6191 confirmed that if there is no likelihood of confusion as to origin of goods, a likelihood of association alone will not be sufficient to show infringement.
    [7] However, whereas under the LOAR, LOCOG must prove a likelihood of association, under the OAR it is assumed that there is a likelihood of association where a controlled representation occurs; it is for the defendant (i.e. the person making the representation) to prove that in fact there is no likelihood of association.
    [8] Para. 2, Schedule 4, London Olympic Games and Paralympic Games Act 2006
    [9] Para. 3, Schedule 4, London Olympic Games and Paralympic Games Act 2006
    [10] Section 4, Olympic Symbol etc. (Protection) Act 1995; Para. 6-10, Schedule 4, London Olympic Games and Paralympic Games Act 2006
    [11] For a full list of the acts which can lead to criminal sanctions, see section 8 of the Olympic Symbol etc. (Protection) Act 1995.