“I know that the IOC and the USOC do definitely have a team of lawyers who send out cease-and-desist letters and notices,’’ said Fara Sunderji, a New York partner with the international Dorsey & Whitney law firm.
Inside sports business
Get ready this week for a barrage of social-media tweets from Winter Olympic athletes thanking their sponsors before they’ve even skied, sledded or fired a puck in competition.
That’s because the International Olympic Committee’s controversial Rule 40 blackout period will be in effect Feb. 1-28 for next month’s Games in Pyeongchang, South Korea. During that time, the IOC and United States Olympic Committee will enforce compliance with the rule preventing nonofficial Olympic sponsors and their athletes from any brand promotion linked to the Games, including social-media postings.
The rule has been around for years when it comes to policing advertisements by non-Olympic sponsors. But with social media gaining in prominence, amendments were made to Rule 40 before the 2016 Summer Olympics in Rio de Janeiro aimed at clamping down on Twitter, Facebook and Instagram postings “for commercial purposes.’’
It now bars non-Olympic sponsor companies and their athletes from making Twitter posts with the hashtags #TeamUSA, #Olympics, #GoForTheGold, #Pyeongchang 2018, or any other USOC-branded tags. Also, the IOC put up a list of banned terms and words for social media that include: effort, challenge, victory and medal.
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Even photos of medals can’t be shown. Nor can photos of the official Olympic rings, logo or mascot. Athletes can share photos with their own experiences, but no videos from the “Field of Play.’’
And when it comes to non-Olympic sponsors congratulating athletes? Or athletes thanking a non-Olympic sponsor? Don’t even try it, says a legal expert who consults with firms about such sponsorships.
“I know that the IOC and the USOC do definitely have a team of lawyers who send out cease-and-desist letters and notices,’’ said Fara Sunderji, a New York partner with the international Dorsey & Whitney law firm. “In the past, they’ve not been shy to go after small businesses and large businesses.’’
She isn’t kidding.
Right before the Rio Games, American middle-distance runner Kate Grace won the women’s 800 meters at the Olympic trials. A Seattle-based sports-apparel company, Oiselle, which sponsors Grace, sent out an Instagram saying “She’s going to Rio!’’
The next day, as first reported by Yahoo Finance, the USOC sent a letter demanding Oiselle take down the post and threatening to “exercise all available remedies’’ to force compliance. Oiselle afterward reverted to mentioning the Games as “The Big Event in the Southern Hemisphere.’’
Sure, Rule 40 isn’t the first attempt to prevent “ambush marketing’’ by nonaffiliated sponsors mooching off big sporting events. The NFL and NCAA are notoriously vigilant in protecting trademarks for the Super Bowl and March Madness.
But the IOC and USOC restrictions carry an even bigger legal hammer. Unlike major pro or college sports organizations, the nonprofit USOC receives special trademark protections under Title 36, Subtitle II, Part B of the U.S. Code of Federal Statutes — giving it exclusive rights to words, phrases and symbols associated with the Olympics.
In regular infringement cases, a company must prove unauthorized use of its trademark caused confusion among consumers. But with the special protection, the USOC merely has to show a trademark — be it a word, phrase or symbol — was used at all in order win a court battle.
“It’s a little bit more than just your run-of-the-mill trademark owner,’’ said Sunderji, a specialist in trademark selection, prosecution and litigation.
Rule 40 has caused frustration for financially strapped Olympic athletes seeking needed sponsorship dollars. Athletes violating the rule face sanctions from fines to disqualification and stripping of medals.
There’s likely a happy middle ground that would protect the biggest official Olympic sponsors — some paying $200 million for the privilege — without going all George Orwell on us. Policing the ability of smaller companies to congratulate athletes on Twitter seems to infringe on the whole Olympic-spirit thing, not to mention trying to dictate our natural impulses as humans.
The IOC and USOC, under mounting athlete pressure, modified the rules somewhat for the Rio Games. They allowed non-Olympic sponsors to seek special exemptions and run advertising campaigns related to athletes if they applied ahead of time and refrained from using official trademarks.
Under Armour famously took advantage of this via a campaign around swimmer Michael Phelps.
But lesser-known athletes complain the submission deadlines are too far out. Nonofficial sponsors had to apply for Pyeongchang exemptions and submit campaigns for approval by Aug. 1.
Many athletes didn’t even qualify for Pyeongchang until this month, making it unlikely any company would design a campaign around them by late summer.
“If you’re uncertain whether an athlete’s going to make it and you have to invest this money way ahead of time, the calculation might not be there for the brand,’’ Sunderji said.
Phelps was able to tweet his thanks to Under Armour under the relaxed rules. But for nonofficial sponsors without exemptions, Sunderji advises it isn’t worth the risk.
There’s actually precedent for companies being sued for congratulatory advertising.
A jury in 2015 awarded former NBA star Michael Jordan $8.9 million after the Dominick’s Finer Foods grocery chain took out a Sports Illustrated ad congratulating him for making the Basketball Hall of Fame. Jordan argued he should have been paid fair market value for his name being used in the ad.
Sunderji warns corporate Twitter accounts are increasingly viewed as company-branding extensions by courts. In other words, a Jordan-like ruling in the USOC’s favor over a social-media post isn’t as improbable as one might think.
And so, by next week, the safest way for many Olympic athletes and sponsors to exchange mutual admiration will be by picking up the telephone.
As long as they don’t livestream the call on Twitter.