As we approach the 2010 Winter Olympics, the temptation for businesses to find opportunities to capitalize by associating their products and services with the Games is growing.

At the same time, VANOC has been steadfast in its message that it will diligently enforce its legal rights to preclude any unauthorized use of Olympic trademarks. The purpose of this article is not to debate the fairness of the rules or whether they should be strictly enforced, but rather to provide some clarity as to what those rules are.

Prohibited uses

The federal Olympic and Paralympic Marks Act (the “Olympic marks act” or the “act”) prevents businesses and individuals from using certain words and marks in order to profit from an unauthorized affiliation with the Vancouver Games. The act affords heightened protection for specific images, words and phrases associated with the Olympics generally and with the 2010 Vancouver Games in particular. Its objective is to thwart “ambush marketing,” which occurs when businesses use Olympic trademarks or associated images in an attempt to mislead consumers into believing that the business is affiliated with or is an official sponsor of the Olympic Games.

Even though the act has been criticized as “draconian” because of the protection it affords generic words and phrases that would not otherwise receive trademark protection, similar legislation has been enacted in other Olympic host countries.

While trademarks are ordinarily protected in Canada under the federal Trademarks Act, the Olympic marks act creates a special legal framework for Olympic marks and certain related phrases. Fair or not, the act’s objective is to prevent businesses from having any direct or implied association with the Games or the organizers if they haven’t paid for that privilege.

Section 3 of the Olympic marks act prohibits the use of trademarks owned by VANOC, the Canadian Olympic Committee (COC), the International Olympic Committee (IOC) and the Canadian Paralympic Committee (CPC). Those trademarks are listed in Schedule 1 of the act. The prohibition extends to the use of marks that are likely to be confused with Olympic marks. The act also prohibits the use of certain generic “expressions” listed in Schedule 2 of the act, such as “Vancouver Games,” “Vancouver 2010” and “Canada 2010.”

Finally, the act prevents companies from engaging in activities that mislead or are likely to mislead the public into believing the business is endorsed by or associated with VANOC, the Games, the COC or the CPC.

In considering whether the public is likely to be misled, the courts will take into account whether there has been usage of a combination of the expressions set out in (i) Part 1 of Schedule 3 (e.g., combinations of “Games,” “2010” or “medals,” etc.), or (ii) Part 1 of Schedule 3 together with any expression set out in Part 2 of Schedule 3 (e.g., combinations of any of “Games”, “2010” or “medals,” etc., with “winter,” “gold,” “silver,” “bronze,” “Vancouver,” “sponsor” or “Whistler”). So, for example, the combination of “Vancouver” and “medals” is prohibited.

Permitted uses

Section 3(4) of the act enumerates the limited circumstances in which certain Olympic marks may be used in business. If an entity uses such a mark in a business without authorization and does not fall within one of the limited number of exceptions, it will have breached the act. The exceptions are:

  1. Approved users with a valid written approval who actually use the mark in accordance with that approval.
  2. Trademarks used before March 2, 2007.
  3. Public authorities such as federal or provincial governments or universities.
  4. Wine and spirit labels where the mark is also a protected geographical indication from which the beverage originates.
  5. Addresses and geographic place names.
  6. Personal names.
  7. Past and current Olympians.
  8. News reporting and criticism.
  9. Artistic work, provided it is not reproduced on a commercial scale.

It is important to know that the use of an Olympic or Paralympic mark in the publication or broadcasting of a news report relating to Olympic Games or Paralympic Games or for the purposes of criticism or parody relating to Olympic Games or Paralympic Games is not a use in connection with a business. In addition, the inclusion of an Olympic or Paralympic mark by the author in an “artistic work” as defined in the Copyright Act is not in itself a use in connection with a business if the work is not reproduced on a commercial scale.

Enforcement

In the case of a breach, any one of several entities has standing to commence an application for relief including various official organizations, such as VANOC, and certain authorized entities, such as sponsors. These entities may make an application in federal court within three years of the alleged violation. Various remedies are available including:

  • injunction;
  • damages, including punitive damages;
  • publication of a corrective advertisement; and
  • destruction, exportation or other disposition of the offending product.

The act makes it easier for an applicant to obtain an injunction than would ordinarily be the case by removing the normal requirement to demonstrate “irreparable harm.” In addition, under the act, the applicant needs to prove only that the public is “likely” to be misled and not that the public was actually misled.

Although the act prevents the use of a broad class of marks and expressions associated with the Olympics, because of its specificity in defining these marks and expressions, there is room for companies, if they are careful, to use images and expressions to promote their businesses without offending the act.

The recent product-line release by Lululemon (marketed as its “Cool Sporting Event That Takes Place in British Columbia Between 2009 and 2011 Edition”) is a creative and, by all appearances, very carefully crafted marketing strategy.

Time will tell whether Lululemon’s “tap dance” through the legal hoops of the act will be challenged. But do not be misled; anyone seeking to “bend the rules” runs serious risks. The keys are to refrain from using specific prohibited words and to avoid words or phrases that are likely to create a false impression that there is an association with Olympic organizations or that the business is a sponsor of the Olympics.