Thursday, July 26, 2012

Olympic brand protection: draconian or justified?

Two billion pounds are needed to stage the 2012 Olympic Games, and LOCOG has to raise it somewhere.(1) What does it have to sell?  - tickets, broadcasting rights, merchandise, the exclusive right to use Olympic intellectual property (especially brands and symbols) and exclusive rights to ‘associate’ with the Games.

Since the Los Angeles Olympics in 1984(2) sponsorship money has enabled the Games to exist. The event has grown so large that the idea of any one city being able to afford it out of its public’s purse is now impossible. The value of broadcasting(3) and other product sponsorship rights dwarfs the amount of money that can be raised from selling tickets or furry mascots and t-shirts. The value of the sponsorship rights obviously depends on how much “exclusivity” is offered. The more that competitors are locked out of the game (pardon the pun) the higher the marketing value.

And so we have the special extended protection of the time-limited London Olympic Games and Paralympic Games Act 2006 which creates the London Olympics Association Right (the so-called LOAR). The Act was introduced when London won the right to host the Games, and has been the cause of grumblings and assertions of ‘draconian’ ever since, as non-sponsors of the Games assess the strict limits it places on what they can and cannot do.

It is new legislation with no court precedents - LOCOG and its advisors need to test the extent of the law and tread various fine lines between maintaining their undertaking to protect the paying sponsors, warn off smaller operators who inadvertently tread too close, and yet not stifle the community spirit around the Games.

Branding information on the LOCOG website is detailed, and can seem to prohibit just about every utterance of ‘Olympics’ or ‘2012’. That’s not right, of course - to be objectionable under LOAR the use must tend to indicate an affiliation with or sponsorship of the Games which the user does not have (and, unlike the official sponsors, has not paid for). There are also numerous defences.

The big enforcement challenge for the London Olympics is going to be social media. In a mere four years since the Beijing Games the use of social media platforms has skyrocketed, and LOCOG can expect just about every athlete and most of the spectators to be carrying a smart phone with which they can Tweet real-time comments or post photos on Facebook or videos on YouTube. In many ways this should boost the community spirit around the Games and engage people in the event. The IOC is already calling London “the first conversational Games”.(4)

But the undertakings to the sponsors have to be honoured, and LOAR enforced. LOCOG will issue careful instructions to athletes and officials - no Tweeting about non-sponsor brand names, no journalistic reporting, and certainly no videos. The paying public will be harder to control. There is some concern(5) that posting photos of the Games on Facebook might run foul of LOCOG’s rules, but sharing for private purposes is not prohibited.

The grumbling about these laws and regulations often misses some essential points. The policy behind them is driven largely by the International Olympics Committee, and was a clearly stipulated part of the deal when London bid for the Games.

But the most important message that LOCOG needs to convey is: if they can’t raise the £2bn required through generously-enforced sponsorship deals, then either the British public must meet the shortfall or there is no Games. It is a misconception that the public has “paid for the Games” - the public expenditure goes into venues and infrastructure.(6) Presentation of the Games themselves is extra. So let’s hear it for Our Sponsors, and stop grumbling about using IP laws to give them value for their Olympic dollar.

(1) On Olympic fundraising see Kenyon, J  and Palmer, C  (2008) ‘Funding and sponsorship; the commercial impact of the 2012 London Olympic Games — some considerations’  Journal of Qualitative Research in Sports Studies, 2, 1,  29-44
(2) In that year Los Angeles was the only city left bidding for the Games, and to pay for them the IOC allowed it to set up the first private Olympic Organising Committee, creating the model used ever since.
(3) NBC is reported to have paid US$1.2 billion for the broadcast rights to London’s Olympics. Guardian, 6 June 2011
(4) Alex Huot, IOC’s Swiss-based head of social media, reported in the Guardian, 14 April 2012
(5) Guardian, 14 April 2012
( 6) The Olympic Delivery Authority (ODA) is the public sector body responsible for the delivery of the new venues and infrastructure required for the Games. The ODA budget is drawn entirely from the public sector, including the National Lottery. Its budget, reported in March 2007, was £9325 million.

- Annette Freeman

This article appeared in the June 2012 issue of Intellectual Property Magazine