LOCOG Plans to Ambush Unauthorised Olympic Marketing

Published 26 May 2010 By: Jon Walters

Jonathan Walters of Charles Russell LLP reviews how the London Olympic Games and Paralympics Games Act 2006 will affect the plans of the sports industry and sponsors to engage in marketing around the Olympics.

For non-Dutch and Ivorians amongst us, the match between Holland and the Ivory Coast in the 2006 World Cup in Germany is unlikely to have lingered long in the memory. A decent game on the pitch but hardly a classic (which ended 2-1 to Holland with goals from Van Persie and Van Nilsterooy for reading football anoraks), it remains memorable for one of the more peculiar incidents in World Cup history. Over a thousand Dutch fans found themselves barred from entering the stadium unless they removed their trousers: those trousers being orange lederhosen bearing the Bavaria beer name, which had been handed out free before the game and which conflicted with Budweiser’s position as official sponsor of the World Cup. The resulting fall-out was huge and Bavaria generated worldwide media coverage for its brand in a classic ambush marketing exercise, without an obvious legal recourse available to Budweiser or FIFA.

Fast forward to London 2012 and the legal landscape for those looking to pull similar stunts and more mainstream (but unofficial) marketing exercises is a minefield. As a requirement of the IOC, the winning bid city had to introduce comprehensive legislation to tackle “ambush marketing” – that is to say in the IOC’s words, “a planned attempt by a third party to associate itself directly or indirectly with the Olympic Games to gain the recognition and benefits associated with being an Olympic partner [without being an official Olympic partner]”. With the top 12 official partners at Beijing alone paying over $800 million for partnership rights, the rationale behind the legislation in order to protect the value of Olympic sponsorship is obvious. In the UK, the result is The London Olympic Games and Paralympic Games Act 2006.

Aside from some initial reaction, the Act has received relatively little attention to date, but this is rapidly changing as corporates and sports retailers start to plan their marketing programmes for the period up to 2012. This, together with impending secondary legislation on advertising in the vicinity of Olympic venues (namely the Advertising and Street Trading Regulations due for consultation some time this year), means that the attentions of companies looking to market around London 2012 should be turned to the provisions of the Act.

What then does it say? In order to tackle ambush marketing, the Act creates the London Olympic Association Right (“LOAR”), a civil right conferred on the London Organising Committee of the Olympic Games (“LOCOG) to prevent any activity which creates an unauthorised association between a person, good or service and London 2012. By way of a blatant example, a non-official partner advertising that it is a “Supporter of the London Games”, infringes this right. The penalty for breach could take the form of a fine, injunction, damages for loss suffered by LOCOG or an account of profits.

What has troubled lawyers and non-official partners is the breadth of activity that is caught by the definition of unauthorised association and the subjectivity which is required to assess whether such an association has arisen. Any “representation” (any image, graphic design, sound or word (spoken or written)), be it in TV, Internet, billboard, press or other physical advertising or materials, suggesting an association with 2012 and which is used in the course of trade and in relation to goods and services is on the face of itforbidden, subject to defences. It’s then a case of contextually analysing the use of that “representation” to assess whether it does indeed create such an association. It is this analysis which has caused much head scratching.

It is unfortunate that the legislation is silent on how the analysis of whether an association has been created should be carried out. There are certain listed expressions – namely “Games”, “2012”, “Two Thousand and Twelve”, “Twenty Twelve”, “Gold”, “Silver”, “Bronze”, “London”, “medals”, “sponsors”, “summer” – which are of special relevance. However, it is easy to see how there are countless innocent uses of these terms in advertising, for example a travel agent advertising “summer 2012” packages. LOCOG has issued further guidance on how to determine whether a concept of association has been created, but this has no statutory footing and does little more than emphasise the point that context will at all times be critical.

There are various defences available to LOAR, including the use of infringing representations for honest commercial practice (another vague and difficult to interpret provision of the Act) and for editorial and journalistic purposes.

If LOAR wasn’t enough for marketers to swallow, there are further more prescriptive regulations on physical ambush marketing due to be introduced. These Advertising and Street Trading Regulations will be made available for consultation later this year prior to being laid before Parliament and seek to clamp down on the type of physical ambush marketing carried out by Bavaria beer in and around Olympic venues from two weeks before the opening ceremony to 5 days after the end of the Paralympic Games (27 July – 9 September 2012).

There is precious little information on the likely details of the Regulations. We know that they will cover a wide range of advertising, including billboards, fly posting, marquees and corporate villages, projected advertising, leaflets and promotional products (those Bavaria lederhosen again...). In short, if it promotes a brand and you can see it, it will be advertising for the purposes of the Regulations.

We also know that the Regulations will extend to all significant Olympic venues and not just the Olympic stadium and park in Stratford. Cunning advertisers planning to set up banners near the rowing lake in Eton Dorney will be affected just the same as those in East London. It is worth noting that is not just the venue itself that is protected, but any activity “in the vicinity” of the venue, currently expected to be a few hundred metres but adapted as appropriate for the nature of the venue and type of event. The definition of “in the vicinity” seems set to be the most hotly contested part of the Regulations. The principle may be clear to all, but pinning it down is fraught with difficulty, particularly when you begin to consider the extent of “venues” for road cycling, the marathon and race walking. Are competitors to Coca Cola, Adidas and McDonalds going to be banned from advertising across 26 mile swathes of London? The common sense answer is, of course, no, but it is allowing for this adequately in the legislation that is not necessarily easy. Our understanding is that there will be an exemption for the continuance of normal, pre- existing trade, shop signage and advertising and it is to be hoped that this will be framed widely enough.

As noted above, it is a requirement of the Act that the Regulations are subject to consultation by interested parties and we anticipate a pique of interest from concerned parties when they are released for consultation later in the year.

Finally, there is an added layer of complexity when it comes to the use of individual athlete images in advertising and marketing materials. Plainly, the use of Usain Bolt as a prominent Olympic athlete to endorse a product around the time of the Games immediately increases the risk of that endorsement infringing LOAR, as the concept of association between that product and the Olympics in the eyes of the public is more likely. What’s more, the Olympic Charter (Rule 41) prohibits Olympic athletes from allowing their pictures and even their name to appear in advertising during the Games. This blanket ban may astonish some, but it is set in stone in the Charter. While companies carrying out the advertising are not subject to the Charter, athletes risk disqualification or withdrawal if there is infringement. In practice, the rule is often flouted (after all, is the IOC likely to want a Olympics without the likes of Usain Bolt or Michael Phelps?), but should not be ignored, particularly where blatant advertising in competition or at ceremonies is planned.

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Jon Walters

Jon Walters

Partner, Northridge

Jon provides commercial and corporate advice to clients. He is recognised by the directories as a “real go-to adviser” and a “commercial and regulatory expert”, with particular expertise on governance, corporate advice and commercial rights.

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