Olympic sponsorship deals

Is the new legislation on track for 2012?

There may still be five years until the start of the 2012 London Games but businesses need to move swiftly to take advantage of the commercial climate created by them.  However, businesses also need to tread very carefully, as new legislation makes using Games-related words a legal minefield.  This, the first of a series of briefs on this subject, highlights the tactic of Ambush Marketing together with the general effects of the new legislation.  

Legislative measures in relation to advertising and marketing are designed to tighten the protection of Olympic intellectual property and to prevent unauthorised marketing in connection with the Games.  It is crucial that the London Organising Committee of the Olympic Games (“LOCOG”) can offer exclusivity to sponsors who have paid such large amounts for the privilege to be associated with the event. To this end, the IOC requires that candidate cities undertake to protect Olympic marks and imagery, prevent ambush marketing and maintain advertising-free venues.  Furthermore, it restricts market clutter, prevents the over-commercialisation of the Games, prevents inappropriate marketing and protects the high standards associated with the Olympic ideal. 

Ambush marketing

Ambush marketing is the attempt by some businesses, who are not official sponsors of an event, to employ marketing tactics in order to gain commercial advantage from the event, without having to pay for the privilege.  This is essentially where a company attempts to ambush or undermine the sponsorship activities of a rival that owns the legal rights to sponsor an event; often by creating the sense that they, and not the actual sponsor, are associated with the owners of the event or activity.

In many cases ambush marketing is perfectly legal; any actual infringements of intellectual property laws are very hard to establish.  The use of use of another company’s trademark or registered design; the copying of another’s work; or the making of any misrepresentations is easily avoidable by the ambush marketer.  Therefore the introduction of new legislation has been seen as the solution to completely prohibit such practices.   

Effect of the legislation

As with most new legislation some think that it is surplus to requirements, believing that current provisions are sufficient to prevent any would-be ambush marketeers.  Others feel that certain gaping loopholes have been closed as a result of the new Act.  Whatever the thinking, it is clear that the new provisions are more stringent in nature.  This will inevitably have an impact on the so called “halo effect” that a large sporting event, such as the Olympics, brings to the host nation’s economy.  The provisions within the legislation will effectively give the IOC a monopoly on both certain words and also on combinations of those words.  There is a fear that localised businesses will be unnecessarily penalised as they will be unwittingly caught out by the Act.  Therefore, both local businesses and advertisers alike, need to be aware of and fully understand the legislation.  The provision of clear and careful guidance by legal advisers is essential if this potential legal quagmire is to be navigated successfully.