Marketing with the London 2012 Olympic Games or Not associating with a sporting event to be held in the UK next year

15 December 2010

Tom Snaith, Geoff Hussey

The main heading of this article uses a ‘controlled representation’ and is thereby presumed to infringe the Olympic Association Right (“OAR”)[1].  It also uses a ‘Listed Expression’ which shall be taken into account by the Court when determining whether there has been an infringement of the London Olympic Association Right (“LOAR”). Although the contrived sub-heading does not use a ‘Listed Expression’ it could nonetheless infringe the LOAR.

This article will look at ambush and high risk marketing in relation to major sporting and other high profile events. We’ll then look at the legislative framework that has been put in place to prevent marketers making unauthorised associations with the Olympics and specifically the London Games in 2012.  In so doing, we’ll try to decide whether the legislation has struck the right balance between the conflicting interests of official sponsors and those of the wider marketing community.

Ambush Marketing

Ambush marketing is possible at any high-profile event that is funded, at least to some degree, by sponsorship fees (this can include anything from sporting events to music events and other cultural events).  The events at risk are those that are funded, at least in part, by sponsorship revenue.  Sponsors of such events pay to advertise at or in connection with the event and event organisers usually accommodate their needs to facilitate payment of the vital sponsorship fees required for the staging of the event.  The sponsorship agreements put in place vary but usually will allow the sponsor to use the event and its IP to advertise their brand, allowing the sponsor to call itself an “official” supplier/sponsor and ride on the wave of goodwill that accompanies such events.  Sponsorship is usually an exclusive arrangement, particularly in relation to the sponsor's area of business, and excludes competitors from associating with the event – or more accurately the event organisers are not allowed to permit the use of a competitor’s brand.

A company or brand owner implementing an ambush marketing strategy will then attempt to associate itself with the event and appropriate some of the event’s goodwill without paying the fee necessary to become an official sponsor.  The use of high profile events is an effective way of increasing exposure of a brand, both as a result of the large audience and as a result of the positive atmosphere that is generated by the event. 

For a competitor of an official sponsor ambush marketing can be even more effective.  Due to the conflict between the brands and the “official” / “unofficial” boundary, there is an immediate tension, which plays to the advantage of the ambushing brand.  Not only does the “unofficial” brand gain market exposure in the context of the major event, it does so at the expense of the “official” brand whose impact is diluted. While there are legal implications and risks around an ambush marketing strategy, these risks are often outweighed because of the generally positive public perception of ambush marketing. Hence, even if ambush marketing campaigns are caught and “punished”, due to the brand exposure generated, businesses can view the ambush as a success.

However, such tactics are seen by event organisers as freeloading on the back of the event’s success.  They argue that they alone have the right to exploit the event and that ambush marketing undermines the financial basis for the staging of the event, which potentially puts the event’s future into jeopardy, as sponsorship agreements have a reduced value to the official sponsors.

The London 2012 organisers, The London Organising Committee of the Olympic Games (“LOCOG”), have said that they do not want to make a profit from sponsorship fees and ticket sales but want them to be sufficient to enable the Olympics to be run smoothly and be self funded.

Past Examples of Ambush / High Risk Marketing

At previous Olympic Games many marketers have attempted to unofficially cash in on the event.  Atlanta 1996 was a key event in the history of ambush marketing and was the time when marketers became more sophisticated in this regard.  These Olympics saw the large scale and high expense marketing of Nike, which established its Nike Village opposite the athlete’s village, handed out Nike merchandise to spectators entering the event and bought up most of the advertising space in the city.  This activity swamped the exposure of the official sponsor, Reebok.  It was also in Atlanta where Linford Christie famously wore contact lenses with the Puma logo etched into them, again directly impacting Reebok.

More recently there were several ambush attempts in connection to the 2010 South Africa World Cup.  The most notable and recognised example was when 30 Dutch women each wearing the immediately recognisable orange Bavaria beer dress attended a game between Holland and the Ivory Coast.  Again the media exposure for Bavaria beer as a result was significant was and no–doubt detrimental to the official sponsor Budweiser.  At the same time the domestic South African airline, Kulula marketed itself as the “Unofficial National Carrier of the You-Know-What”. Both of these examples attempt to link the World Cup to the marketers in the minds of the public. The question is to what extent should these types of marketing activity be prevented?

The Legislation

To counter the problem of ambush marketing, and thereby protect the exclusivity of official sponsors, the International Olympic Committee has required member states of the Olympic movement to provide protection in relation to the Olympic symbol, words and motto. In the UK this protection arises under the Olympic Symbol etc. (Protection) 1995 (the “1995 Act”).

As part of the bidding process candidate cities must also show that they have effective means to counter unwarranted associations with the prospective games themselves. As such, the UK brought in the London Olympic Games and Paralympic Act 2006 (the “2006 Act”). The 2006 Act amended and strengthened the 1995 Act so as to provide protection in respect of the Paralympics, and also introduced specific protection in relation to the London Games.

The Association Rights

There are two rights of association:


(i)  The Olympic Association Right (the “OAR”, under the 1995 Act) and the Paralympic Association Rights (the “PAR”, under the amended 1995 Act); and

(ii) The London Olympic Association Right (the “LOAR”, under the 2006 Act). 


LOCOG is proprietor of the LOAR. Together with the British Olympic Association and British Paralympic Association, LOCOG is the joint proprietor of the OAR/PAR until the end of 2012.

Meaning of Association

The OAR/PAR and LOAR are defined, for the purposes of official sponsors, as the exclusive right to be associated with the Olympics, Paralympics or London Olympics respectively. It is this right that official sponsors have the benefit of. The intention of the OAR/PAR and LOAR is to prohibit other unauthorised associations between a person, product or service and the Olympics, and London Games respectively. Both the 1995 Act and 2006 Act contain the same definition of the meaning of ‘association’. For the purposes of the legislation the definition of ‘association’ is broad, such that it captures any concept of a contractual or commercial relationship, or corporate or structural connection, or the provision of financial or other support, in relation to the Olympics.

Infringement of Olympic and Paralympic Association Right

The OAR and PAR are infringed by use of a ‘controlled representation’ in the course of trade. The controlled representations include the five circle emblem, the word Olympics and Paralympics and variations thereof, and the official mottos (see table), or anything so similar that would also create an association with the Olympics.

In its guidance, LOCOG says that ‘use in the course of trade’ bears its ordinary meaning, and includes use of a controlled representation in advertising and on goods, and in relation to the supply of services.  It seems likely that interpretation of ‘use in the course of trade’ will be interpreted in the same way as in trade mark law i.e. where use takes place in the context of a commercial activity with a view to an economic advantage, and not as a private matter.

The effect of the legislation is that use of a ‘controlled representation’ in the course of trade is deemed to infringe. The burden of proof is on the user to show that, in the particular circumstances, no such association is made out, or that one of the defences under the 1995 Act applies. However, it is difficult to imagine circumstances where use of the five Olympic rings, for example, would not create such an association.

The press have picked up on two recent examples where the OAR has been enforced. In 2007, having learnt that Weymouth was to host the Olympic sailing events, the owner of the ‘Fantastic Sausage Factory’ in the seaside town, put up a shop sign that depicted the five Olympic rings. Although the rings were depicted as being made out of sausages, that was not enough to prevent a cease and desist letter being sent by the British Olympic Association. The owner of the shop was quoted as saying that he was ‘just trying to enter into the spirit of things’ but ultimately conceded and took the sign down.

Around the same time, Little Chef reportedly contacted LOCOG in order to clear a proposed advert in relation to their ‘Olympic’ breakfast. Little Chef wanted to celebrate the twentieth anniversary of its famous breakfast and wanted to run a campaign which featured the voice of UK decathlon gold medal winner Daley Thompson. Under the legislation there is a defence to infringement if you have been using a controlled representation since the date the legislation had been introduced. LOCOG conceded that the defence applied in relation to the Olympic breakfast itself, but objected to the proposed campaign on the basis that use of the voice of a famous Olympian in conjunction with the breakfast created a further association that was prohibited under the legislation.

Infringement of LOAR

The test for infringement of the later LOAR under the 2006 Act is different to that of the OAR/PAR. It is less prescriptive and, as a result, more uncertain. The LOAR is infringed by use in the course of trade of any representation in a manner likely to suggest an association with the London Olympics. So, unlike the 1995 Act, the 2006 Act does not set out certain ring fenced representations the use of which automatically raises a presumption of infringement. Instead, the test is broader and applies to use of any representation, visual or verbal, that suggests an association with the London Olympics.

This was not always the intended outcome. The original London Olympics Bill did contain particular words and phrases the use of which would give rise to a presumption infringement. These provisions were watered down during Bill’s passage through Parliament. However, we are left with a set of words which when used in combination are deemed to be ‘Listed Expressions’ (set out in the table below). Examples include ‘London 2012’, ‘Summer Games’ and ‘London Games. Use of a Listed Expression is not fatal in deciding whether there has been infringement of the LOAR, but will be taken into account by the Court when deciding whether there has been an infringement of the LOAR. From a practical point of view, use of a Listed Expression may be a red flag to LOCOG when deciding whether or not to bring an action for infringement of the LOAR.

The effect of this means that even if you don’t use a Listed Expression, the LOAR can still be infringed. In practice this gives LOCOG flexibility to bring a claim for infringement of the LOAR even where there is no use of a Listed Expression.

In its guidance (see London 2012’s UK Statutory Marketing Rights April 2010) LOCOG have said that the context and circumstances will dictate whether an association has been made. LOCOG have given some guidance on factors which they think could give rise to such an association. These include use of the colours of the Olympic rings, Olympic related imagery e.g. the Olympic torch, and images of venues or places associated with the London Games. In their example, the cumulative effect of a picture of a man running with a torch against a London cityscape would create an association with the London Olympics and be an infringement of the LOAR in their view. Other contributory factors which LOCOG will take into account are the timing of the marketing activity and past conduct of the would-be infringer. While this guidance is welcome, it must be remembered that it comes from LOCOG (the enforcer of the LOAR), and not from the legislation or the Courts.

Conclusions

As we approach the London 2012 Games it will become increasingly tempting for businesses to align their marketing with the Olympics, either through clever and imaginative campaigns, or through large scale ambush techniques. In relation to large scale ambush techniques, such as those witnessed in previous Olympics and the World Cup in 2010, there are provisions in the legislation ensuring ‘clean venues’ and preventing counterfeit Olympic related merchandise. There are sound economic reasons for addressing these two issues.  However, the legislation and guidance from LOCOG goes further in addressing unauthorised associations generally. The economic and/or political justification for preventing such activity is less clear.

It is clear that LOCOG view the association rights as separate and distinct from rights in trade marks (certain of the controlled representations and listed expressions are registered in the UK) and passing off.  There is almost strict liability in relation to use of a controlled representation and infringement of the OAR/PAR. As regards infringement of the LOAR, LOCOG distils the test into one question i.e. has an association with the Olympic Games been created? This is clearly a lower threshold than what would be the equivalent test for misrepresentation under the law of passing off i.e. has the marketer represented that they are an official sponsor of, or are otherwise affiliated with, the Olympics? And, unlike the law of passing off, there is no requirement to show any damage as a result of the association.

If the legislation is really directed to the mischief of marketers impinging on the rights of official sponsors, and is there to protect the funding of large scale events, then (in the view of the authors) the test should be more aligned to the passing off test above.  If this is correct, certain marketing activity that simply gives a ‘wink’ or a ‘nudge’ towards the Olympics, and where the consumer does not perceive that the marketer is an official sponsor, would be permitted. Even in these circumstances, there could be still be remedies under trade mark law. If we are correct in this proposition, then the OAR/PAR and LOAR are really more of a form of statutory passing off. 

It remains to be seen how LOCOG will seek to enforce the association rights in the run up the Olympics, and how the Courts will interpret the as yet untested legislation. For now, in-house legal teams and their marketing departments should be aware of the association right legislation and plan their marketing carefully. Let the fun and Games commence . . .

This article was first published in the January 2010 edition of the World Intellectual Property Report.

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[1] subject to the availability of certain defences, such as use in journalism or publishing information about the Olympics

Authors