In July 2020 the Games of the XXXII Olympiad will kick off in Tokyo, Japan. But now, unlike in years past, Team USA athletes can thank their personal sponsors, and those sponsors can congratulate their athletes and run generic ads during the Olympics. That’s because on October 8, 2019, the United States Olympic Committee (USOC) overhauled its guidance on Rule 40 of the Olympic Charter (Rule 40).
The long-standing International Olympic Committee (IOC) rationale for Rule 40 was that it prevented the over-commercialization of the Olympics while at the same time protecting official Olympic sponsors who, in exchange for their sponsorship, receive exclusive exposure rights during the Games. Under the prior iteration of Rule 40, “no competitor, coach, trainer, or official who participates in the Olympic Games may allow his person, name, picture, or sports performances to be used for advertising purposes during the Olympic Games” unless a waiver was granted.
The rule applied during an advertising Blackout Period intended to prevent so-called “ambush” marketing from diminishing the value of official Olympic sponsorship and discouraging free-riding on the well-known nature of the Games. Specifically, the rule prohibited any advertising between nine days before and three days after the end of the Olympic Games by any non-sponsor, including the images, likenesses, and other endorsements of Olympic athletes. Even outside the Blackout Period, advertising by non-sponsors was required to focus on the athlete rather than the Olympic Game, and non-sponsors were expected to submit advertisements with biographical references to the endorsing athlete as an Olympian to the USOC for approval.
In February 2019, the German Cartel Office (GCO), Germany’s national competition regulator, held that Rule 40’s restrictions on German athletes and their personal sponsors were impermissibly anticompetitive. The GCO’s decision allows German athletes and their sponsors (who are not official Olympic sponsors) to participate in more advertising opportunities and promotional activities ahead of and during the Tokyo 2020 Olympic Games. In response, the IOC amended Rule 40 to apply to all athletes. The new Rule state, “Competitors, team officials and other team personnel who participate in the Olympic Games may allow their person, name, picture or sports performances to be used for advertising purposes during the Olympic Games in accordance with the principles determined by the IOC Executive Board.” Essentially, National Olympic Committees, including the USOC, are now responsible for Rule 40’s interpretation, implementation, and enforcement. In response to these developments, the USOC issued new Rule 40 guidance for Team USA athletes.
The key changes under the USOC’s guidance are: (1) increased opportunity for athletes to honor existing and engage new personal sponsors, (2) less restrictive timelines for athletes aligning with personal sponsors and creative execution, (3) ability for athletes to recognize personal sponsors during the Games, (4) ability for athletes to be recognized by personal sponsors during the Games, (5) a streamlined verification process with for sponsor responsibility and compliance, and (6) shared responsibility between athletes and personal sponsors through a yet-to-be public Personal Sponsor Commitment (PSC).
Although the terms of the PSC are not yet available, the USOC indicates that the PSC will be built into the process of obtaining Rule 40 permission. Specifically, athletes will be required to notify the USOC of their personal sponsors by registering online at any time before or during the Rule 40 period (July 14, 2020 through August 11, 2020) as long as it precedes any athlete marketing during the Games. Then, once registered, each personal sponsor identified by an athlete will receive a link to a clickthrough PSC that requires compliance with this guidance. USOC guidance regarding the PSC states that personal sponsors will be obligated to agree to “specific anti-ambush terms” and “standard protections for Olympic IP that apply at all times.” Sponsors will also be required to accepted certain remedies for failure to comply with the PSC, including (1) cancellation of the Rule 40 permission for all personal sponsors’ athletes, (2) inability to obtain Rule 40 permission for one or more future Games, (3) damages, and/or (4) injunctive relief.
Despite the loosening of Rule 40, restrictions remain: Team USA athletes will be limited to seven thank you messages during the Olympic Games (the content of which will be scrutinized), and personal sponsor messages congratulating athletes can’t use Olympic IP or imply any association, affiliation, connection, or sponsorship with Team USA or the Olympics. Nevertheless, the door to more advertising opportunities for Team USA athletes and their personal sponsors has been opened.
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Finnegan is deeply saddened by the death of our colleague Donald R. Dunner, who passed away on October 16, 2019, after a life of dedication and inspiration to many in IP law. Don was in a category all his own with his talent and distinct knowledge of IP law. His direct approach and enthusiasm for work and life touched everyone who worked with him, and we will miss him dearly.