Focus on Intellectual Property Law October 2006

Getting Ready for the Olympics

In this issue of Legal Writes we examine how to avoid being ambushed by the new legislation brought in to protect multi-national corporations involved in Olympic sponsorship. The effects of the legislation will percolate down to many organisations and businesses whom we represent on both sides of the divide, protecting those who invest millions in sponsorship, and those who wish to legitimately advertise their products by reference to the Olympics. This article explores and discusses what is going to be permitted.

‘Ambush Marketing’ and the London Olympic bill

The London Olympic Games and Paralympics Games Act 2006 (LOGA), approved by Parliament on the 29 March 2006, has armed the Olympic Delivery Authority with new statutory powers to prepare for the 2012 Olympics. Of the measures introduced, perhaps the most controversial is the creation of the London Olympic Association Right (“LOAR”), which aims to prevent businesses promoting their goods or services in association with the 2012 Olympics, unless they have paid fees to the organisers to be an official sponsor.

The wide ranging restrictions on advertising and marketing have led some commentators to deride the new powers as akin to giving Goliath an unfair advantage over David, as smaller traders will find it more difficult than ever before to compete with the large corporate sponsors.

Why has the Government introduced the LOAR?

Over the past 25 years, the practice of ‘ambush marketing’ has become increasingly commonplace, as large scale sporting events have developed into battle grounds for themajor brands of the world. The term ‘ambush marketing’ is used to describe the situation where a brand is connected with a major sporting event, without the proprietor having paid official sponsorship fees to the event organiser. Nike has ambushed the Olympics on several occasions, famously at the Barcelona 1992 Olympics basketball competition. Whilst Reebok had paid huge fees to secure the official sponsorship rights, Nike chose to sponsor the
U.S. basketball team’s press conferences for a much lower figure, and still gained massive exposure in the U.S market.

Due to situations such as these, the Government has stepped in with this new legislation to protect the investment provided by the official sponsors. The new legislation is not restricted in pplication to giants such as Nike however. Businesses of all sizes will be prohibited from capitalising on the 2012 Olympics, unless they pay several million pounds to the event organisers in official sponsorship fees.

The new legislation is not without precedent, as since the late 1990s the International Olympic Committee (‘IOC’) has required that the host country takes necessary steps to prevent ambush marketing. As a result, similar legislation was put in place by the Australian Government for the Sydney Olympics in 2000.

The 2006 FIFA World Cup in Germany enjoyed similar legislative protection, which led in one instance to around 1,000 Dutch fans being forced to remove their orange trousers before they were permitted entry to the Holland v Ivory Coast match. The trousers had been given out as promotional items by a Dutch brewery that was not an official sponsor, and prominently displayed its trade marks.

American firm Anheuser Busch, proprietor of Budweiser beer, had paid around $50m (£27m) for the right to be an official partner of the 2006 FIFA World Cup, and the organising committee were keen to protect the investment that they had made, thereby safeguarding future investment by official sponsors.

What will be prohibited by the new legislation?

It will be an infringement of the LOAR if:

Infringement of the LOAR has a lower threshold than the offence of passing off and trade mark infringement, as there is no requirement for deception or likelihood that the representation will confuse the public.

A specific list of expressions must be considered by the courts when applying the LOAR. The use of any two
expressions contained in Group 1 below, or a combination of expressions from Group 1 and Group 2 will infringe the LOAR

It should be noted that to establish infringement of the above expressions, civil action must be taken against the infringer by the London Organising Committee for the Olympic Games (‘LOCOG’) through the courts. LOCOG will not be empowered to simply fine persons deemed to be infringing, and therefore it is possible LOCOG will only exercise its rights where a serious infringement has occurred. It is expected that legitimate use of the phrase ‘come to London in 2012’ for example, would not be penalised, so long as there is no hint of a connection with the Olympic games.

The new legislation contains the following defences which will avoid liability where successfully used:

Ian Morris Head of Contentious Intellectual Property says:

“We are delighted to welcome Simon to the team. As you will see from his short CV which follows, Simon has a particular interest in matters affecting sports law and media whilst generally assisting with all aspects of the department’s work.