For Olympics, Much at Stake in Trademark Enforcement

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By Anandashankar Mazumdar

July 21 — Just as surely as Olympic torchbearers wind their way around Brazil, Olympics committees are moving to protect their trademark rights—worth hundreds of millions of dollars—in the lead-up to the 2016 Summer Games.

Trademark enforcement actions are as predictable as any other ritual surrounding the biennial Olympic Games, with committees typically facing criticism, mostly from small businesses, for fiercely trying to protect Olympic logos and phrases from use by any party that hasn't paid—and the price is steep—to use them.

Mostly, enforcement stops short of lawsuits. It typically involves sending warning letters to stop even small violators like a corner pizzeria that might hawk two-for-one pies for neighborhood Olympics viewing parties.

“The word ‘Rio’ is the name of a place that belongs to everybody,” said former U.S. Olympian and business owner Nick Symmonds, who is frustrated by U.S. Olympic Committee trademark enforcement policies that go so far as to warn people against using “Road to Rio” and other broad terms. “It’s a massive overreach of their rights and their power.”

Even so, the financial stakes for Olympics committees are exceptionally high. They are paid huge sums by corporate sponsors, who in turn get to use Olympic logos and phrases to promote and advertise their own products. Those sponsors want something back for their money—and don't want the value of their investments diluted by others' unauthorized uses of Olympics trademarks.

Consider Team USA's website, which highlights logos from dozens of international and domestic companies, among them Samsung, Dow, McDonald's, Visa, Ralph Lauren and Smucker's, representing a wide variety of industries and sectors. And the USOC is well paid by those companies in exchange for getting official sponsor status.

The USOC took in $80 million to $100 million, each year, from 2012-15 for “marks rights” sold to sponsors for the use of USOC trademarks, according to an independent auditor's reports.

The USOC did not respond to a request from Bloomberg BNA for an interview for this article.

USOC IP-Related Revenues:

Broadcast Rights

The committee licenses the right to broadcast events to TV networks in exchange for fees.

Marks Rights

Sponsors pay fees for the right to use Olympics trademarks in their own advertising and promotions.

Licensing Royalties

Makers of goods such as T-shirts pay royalties to the committee for selling items bearing Olympics trademarks.

Broadcast Income Peaks During Games

Other sources of Olympics income—large and small—also relate to intellectual property.

For example, licensing royalties—which the USOC gets from sales of branded goods like T-shirts—typically comprise a relatively smaller chunk of USOC income. The committee got just $4 million from those royalties in 2015, a non-Olympics year, but over four times as much—$18 million—during the 2012 Summer Games in London.

During Olympics years, nothing brings in more money than broadcast rights, which are the rights that television networks pay for to air events. NBCUniversal agreed in 2014 to pay the International Olympic Committee $7.65 billion for the rights to broadcast the Olympics in the U.S. from 2021 to 2032 across all media platforms, including free and subscription television, internet and mobile.

Individual Athlete Sponsors Chafe Under Rules

Sponsors paying that kind of money expect a lot in return. That's precisely how smaller companies that sponsor individual athletes can get caught up in the crossfire.

Just a few weeks ago, Seattle-based Oiselle Running Inc., a women’s athletic apparel and gear maker, felt the sting of the USOC's special trademark enforcement stick when it tried to promote a runner it is sponsoring this year.

Oiselle started posting pictures of runner Kate Grace winning Olympic-related events. But even though the pictures belonged to Oiselle, the USOC didn’t like the fact that its trademarks were visible on Oiselle’s promotional blogs. It sent Oiselle an e-mail, asking for their removal.

After being notified of the USOC’s displeasure, Oiselle continued to post its photographs—but with black bars obscuring the often minuscule Olympics trademarks attached to competitors’ uniforms.

Lawyer: It Was Clear Violation

Oiselle founder Sally Bergesen told Bloomberg BNA that the company has been sponsoring Olympic-level athletes for about five years now.

“It takes $300,000 to develop a track athlete to an Olympian,” said Bergesen, whose company's Haute Volée team includes a couple dozen elite runners, including Grace. “I think they should be asking us for the rights to use the image of the athlete, rather than the other way around.”

However, trademark lawyer Rod S. Berman of Jeffer Mangels Butler & Mitchell LLP, Los Angeles, told Bloomberg BNA that he didn’t think the Oiselle situation was a close call.

“This is a blog of a company that sells merchandise,” Berman said. “Whether they’re using that directly on goods or whether they’re using it in a picture, it’s still being used. They’re not a news organization. It’s purely commercial speech.”

Former Olympian Wants Looser Rules

Symmonds, who competed in Beijing in 2008 and in London in 2012 and started Gold Medal LLC in 2014 to market caffeinated Run Gum chewing gum to athletes, told Bloomberg BNA that he could not have had a successful athletic career without the support of his personal sponsor, Brooks Sports Inc. But Symmonds couldn't wear his sponsor’s logo while competing, even though he pushed for his right to do so, because the International Olympics Committee dictates what athletes wear on their uniforms.

“If I didn’t have Brooks, I’d have retired many years ago,” said Symmonds. “It would have been impossible for me to live off the money the USOC gives me every four years.”

Now a sponsor, Symmonds continues to chafe against the rules.

“As an athlete, I can’t court potential sponsors. Any time I go to a potential sponsor, they say ‘Where can I put a logo on your body in competition?’ The answer is ‘nowhere',” he said. “And as a business owner, I want to sponsor athletes, but without being able to connect our brand to our athletes, that’s a horrible return on investment.”

Broad Rights Held by USOC

The controversy over trademark enforcement is also stoked by the wide range of trademarks that the USOC lays claim to. It has more than 200 U.S. trademark registrations or pending registration applications. Its website warns everyone off using obvious terms like “Olympian” but also “Team USA,” “Road to Rio” and “Pyeongchang 2018.”

Trademark disputes with the USOC rarely make it as far as an actual lawsuit. Since 1990, the USOC has filed only 45 trademark complaints in federal district court, according to a docket search on Bloomberg Law. Symmonds, however, has taken his complaints to federal court, accusing the USOC and USA Track & Field of violations of federal antitrust law for barring athletes from wearing their individual sponsors’ logos during games. Gold Medal LLC v. USA Track & Field, No. 16-0092 (D. Or. complaint filed Jan. 16, 2016).

Statute Creates ‘Super' Trademark Protection

Finding the right balance is not easy. The super-trademark rights extended to the USOC by the Ted Stevens Olympic and Amateur Sports Act of 1998, 36 U.S.C. §220501, give it leverage to seek higher sponsorship fees than it otherwise could, according to trademark lawyer Dyan Finguerra-DuCharme of Pryor Cashman LLP, New York.

“The only way the Olympics can succeed is by having exclusivity for their sponsors to use those terms,” she told Bloomberg BNA. “Otherwise, why would you spend so much money to sponsor?”

Also, unlike run-of-the-mill trademark owners, the USOC, under the act, isn't required to show that another entity’s use of its trademark creates a likelihood of confusion on the part of consumers as to goods or services' sources, sponsorships or affiliations. As a result, the committee can stop a very wide range of use of its trademarks—without any showing of confusion.

The Olympics aren’t alone in getting extra-special trademark rights under federal law. Some 200 entities benefit from some degree of “super” trademark protection, mostly government agencies or government-related entities; nonprofit groups such as veterans' associations; and charitable or public service entities like the American Red Cross. Conservation symbols Smokey Bear and Woodsy Owl are among the trademarks controlled by the U.S. government with their own statutory protection.

Balance Might Be Hard to Find

The USOC and other Olympics committees—both international and those representing the other 193 nations that have qualified at least one athlete to compete at the games kicking off Aug. 5 in Rio de Janeiro—are on solid footing in enforcing their rights but could possibly do more to temper the bad publicity generated by heavy-handed tactics, trademark lawyer Robert J. Kenney of Birch Stewart Kolasch Birch LLP, Falls Church, Va., told Bloomberg BNA.

“I tend to come down on these issues generally on the side of the trademark owner,” Kenney said. “But I do understand people’s feeling that it’s heavy-handed or excessive.”

On the other hand, the USOC doesn’t have much choice but to go after every perceived violation if it wishes to remain on firm legal ground.

“If you let one go here and one go there, when you finally go to court, the defendant can say you didn’t object to these other uses,” Kenney said. In that way, the super protection of rights and symbols granted by the Ted Stevens Act cuts both ways—because there is so much potential for violations.

“The benefit of that is that they can pursue every single use,” Kenney said. “The burden of that is they probably have to pursue every single use.”

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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