Looking Ahead to Tokyo 2020

Advertising Law

Summer 2020 may seem like a long way off, but advertisers are starting to consider the opportunities—and challenges—presented by the upcoming Tokyo Olympic and Paralympic Games.

With the world watching the Olympic sporting events over a two-week period from July 24 to August 9, and the Paralympic sporting events from August 25 to September 6, companies may try to use the events to get their name in the public eye. But there are many potential pitfalls facing advertisers, beginning with the legal protections afforded the marks associated with the Olympics and Paralympics.

The Ted Stevens Olympic and Amateur Sports Act granted the United States Olympic Committee & Paralympic (USOPC) the exclusive right to use, license and protect Olympic-related trademarks such as “Olympic,” “Olympiad,” the interlocking rings and event mottos. Each sport’s National Governing Body (NGB)—such as USA Swimming or USA Surfing—also has the right to use certain Olympic trademarks.

Importantly, under the Ted Stevens Act, the USOPC has great power to enforce its trademark rights, with a lower burden in infringement actions. The USOPC can bring a civil action against a party that allegedly uses a mark in a way that falsely suggests an association between the Olympics and the user—but does not have to demonstrate any likelihood of consumer confusion.

This standard was solidified by the U.S. Supreme Court in a 1987 decision, San Francisco Arts & Athletics, Inc. v. United States Olympic Committee, where the USOC (as the USOPC was previously named) successfully enjoined an organization that was making unauthorized uses of the Olympic marks in the organization’s attempt to organize a “Gay Olympic Games.”

The USOPC can also seek remedies provided by the Lanham Act for unauthorized uses of its marks, such as monetary damages, defendant’s profits, attorney fees and injunctions.

Congress crafted this special legal treatment to make it easier for the USOPC to protect its exclusive rights to monetize the symbols of the games in order to fund Team USA. Their thinking was that, the more exclusivity the USOPC could preserve, the more valuable the marks and the more sponsors would pay for rights to use the marks—all of which should lead to more money to support the athletes.

Advertisers could also face potential actions from entities other than the USOPC, including the NGBs or individual Olympic athletes.

In addition to the strong legal protection accorded to the Olympic marks, both advertisers and Olympic athletes have to contend with Rule 40 of the Olympic Charter. Historically, the rule has restricted participants in the Olympics (athletes, coaches, trainers and officials) from allowing their “person, name, picture or sports performance to be used for advertising during the Olympic Games.”

The rule imposed a blackout period of several weeks prior to the games, during the Olympics and extending a few days after the closing ceremony. If an athlete violates the rule, that athlete could be subject to fines or even disqualification from competitions.

For years, athletes criticized Rule 40’s effect on their ability to leverage their athletic success for endorsement deals, particularly endorsement deals with brands that were not sponsors of the USOPC or any other official organizations associated with the Olympics.

In 2015, the IOC updated its Rule 40 guidance to permit Olympic participants to appear in “generic advertising,” whereby Team USA participants could appear in ads during the blackout period if certain conditions were met. These conditions included a six-month prior approval by the USOPC requirement and that no advertising can make an implied association with the games or the Olympic marks.

This summer, the IOC proposed an amendment to Rule 40 that could permit more flexibility for athletes to work with brands. The new Rule 40.3 states: “Competitors, team officials and other team personnel who participate in the Olympic Games may allow their person, name, picture or sports performance to be used for advertising purposes during the Olympic Games in accordance with the principles determined by the IOC Executive Board.”

IOC President Thomas Bach said the shift represented a balance between protecting the Olympic marketing program and recognizing individual athletes’ right to generate income from their name, likeness and athletic career. Each country would be responsible for the implementation of the changes based on additional guidance from the IOC. The USOPC’s implementation plan and guidance have yet to be released.

In addition to the pushback from athletes, the proposed revisions to Rule 40 were likely spurred by a decision from Germany’s Federal Cartel Office that declared the rule as applied to German athletes to be “too far reaching” and “abusive conduct.”

Why it matters: The USOPC has great power with respect to policing the use of the Olympic and Paralympic marks and with respect to how Olympic and Paralympic athletes are permitted to use their own names and likeness around games time. While the USOPC has maintained its vigilance and aggressive tactics in protecting its marks, the recent trend of relaxing the prohibitions under Rule 40 has provided advertisers that are not official USOPC sponsors with more options to use Olympic athletes in their advertising campaigns. It will be interesting to see how much further the pendulum swings to provide current Olympic athletes and non-Olympic advertisers additional flexibility to partner as we get closer to the Tokyo Games.