IntroductionThe Olympic Movement (the‘Olympics’) is governed by its ownprivate legal order whosejurisdiction is based on theparticipating athletes’ contractualagreement to recognise theOlympics’ authority1. Under theOlympic Charter, Rule 40, theInternational Olympic Committee(‘IOC’) determines the type ofadvertising permitted during theOlympic Games2. Rule 40’srestrictions on advertising protectthe Olympics’ intellectual propertyfrom ambush marketing by thirdparties who are not officialOlympic sponsors3.While protecting the Olympics’

interests, Rule 40’s prohibition canunduly limit Olympians’ ability toprofit from the unique opportunitythat their participation in theOlympic Games affords them bydepriving them of the rightful fruit

of their accomplishments4. Athletesparticipating in the LondonOlympic Games in 2012 raisedawareness of this injustice bylaunching a social media campaigncalled ‘#WeDemandChange.’5 WithRio 2016’s opening ceremony lessthan a year away, the IOC has stillnot repealed Rule 40, but instead,has issued vague guidelines toaddress Olympians’ Rule 40 waiverrequests6.This Article examines the Rule 40

guidelines and concludes that theIOC must clarify the guidelines toavoid potential arbitrary,unreviewable, and disparatedeterminations on Olympians’Rule 40 waiver requests.

How Rule 40 operatesThe Olympic Charter, Rule 40gives the IOC’s executive board theexclusive right to determine theconditions under which any formof promotion and publicity ispermitted during the OlympicGames, including any promotionor publicity in which the athletesthemselves might participate in7.Rule 40 generally prohibits

Olympians from advertising withunofficial sponsors during theGames8. Consequently, Olympiansare not permitted publicly toacknowledge, endorse, or evenmention unofficial sponsors,including on Olympians’ socialnetworking accounts9.The Olympics have an interest in

maintaining their financial model,as well as the exclusive right toadvertise, which is enjoyed by theIOC and the official sponsors ofthe various National OlympicCommittees (‘NOCs’)10. Rule 40was passed in 1991 to shield theseinterests primarily from unofficialsponsors’ ambush marketing, inwhich third party brands benefitfrom the athlete’s association withthe Olympic Games withouthaving to pay a royalty to the IOCor any of the NOCs11.

The Olympic Charter extols theOlympics’ high ethical values andde-emphasis of thecommercialisation of sports12. Themassive amounts of money thatofficial sponsors dole out to beassociated with the Olympics,however, tend to obscure thatidealistic picture13. At its core,Rule 40’s purpose is to discourageambush marketing and byimplication, force interestedadvertisers to sign up as officialsponsors (for a pretty penny, ofcourse).The IOC’s recourse against an

unofficial sponsor’s ambushmarketing is to either sue in courtor to wield its own authority overthe athlete featured in theadvertisement with the ultimate interrorem penalty: stripping theathlete of their medals!14

Guidelines for Rule 40 waiversAmid the protests over Rule 40’sdraconian restrictions, the IOCcould have amended or evenrepealed Rule 40’s advertisingprohibition. The IOC chose toleave the Olympic Charter’slanguage untouched in this regardand instead issued guidelinesunder which unofficial sponsorscould apply to NOCs to waive Rule40’s prohibition, allowing athletesto engage in certain promotions,advertisements, and publicity15. InFebruary 2015, the IOC delegatedpractically all responsibility forprocessing these waiver requests tothe various NOCs, and the IOCissued a set of guidelines for theNOCs to follow in decidingwhether to grant the athletes’waiver requests (the ‘Guidelines’)16.Whether Olympians may advertisewith unofficial sponsors during the2016 Olympic Games in Rio deJaneiro depends on how NOCsinterpret the Guidelines.

Procedural flawsThe Guidelines open with a

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Olympic Rule 40 Guidelines:#WeDemandClarificationDuring the London 2012 Olympicgames, athletes raised seriousconcerns about the way theInternational Olympic Committee(‘IOC’) managed commercialmarketing and restricted athletes’possibilities to exploit their imagerights in the context of the games.The #WeDemandChange campaignuncovered stringent regulations thatprotected official sponsors andreduced the athlete’s possibilities tocapitalise on the Olympicopportunity. Alessandro Oliverio,Chair of the Sports Law Practice,and Chistopher M. Delp, OfCounsel, at OLF Law Firm, reviewthe new guidelines from the IOC toaddress these concerns and posenew questions concerning potentialprejudices contained within the newset of rules.

AlessandroOliverio

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Earlier drafts and guidelinesprohibited an undue direct or‘indirect association’ with theOlympics23.On its face, the provision seems

clear enough, as it intends toprotect Olympic property, such aslogos, flag, emblems, anthem, anddesignations from ambushmarketing and any other kind ofunlawful economic exploitation ofOlympic intellectual property. Acloser look, however, reveals thatthe meaning of ‘indirectassociation’ is unclear. This term isopen to differing interpretationsbecause the Guidelines do notprovide interpretation parametersto determine to what extent anadvertisement relates to theOlympics24.A narrow or broad interpretation

of ‘indirect association’ may lead toconflicting decisions on whether togrant Rule 40 waivers. The phraseassumes a discretionary intellectualactivity by the decision maker, theNOC, to determine whether anunofficial sponsor’s advertisementfalls within the possible exceptions.NOC discretion jeopardises the

Guidelines’ uniform application.For example, two or more NOCsaddressing identical or similarwaiver requests could possiblygrant and deny the waiver,respectively, due to a difference ofopinion about the meaning of‘indirect association’. The risks ofconfusion and discrimination arehigh, as this article’s hypotheticalcase study further demonstrates.

The USOC’s implementationThe United States OlympicCommittee (‘USOC’) was one ofthe first NOCs to implement theGuidelines, and other NOCs willlikely look to the USOC’simplementation activities asa benchmark. Although the USOCdid not address substantivematters, such as the interpretiveproblem of the phrase ‘indirect

association’, the USOC didsomewhat solidify its procedure forprocessing waiver requests.Under the USOC’s procedure,

waiver requests must be submittedonline by 27 January 201625. On theone hand, this deadline prejudicesathletes who are not sure whetherthey will even qualify for theGames by that date, asqualifications differ from sport tosport and are sometimes notdetermined until weeks before theGames begin. On the other hand,an early submission deadlineencourages timely decisions by theUSOC, avoiding potential errorsthat often attend a hurried, lastminute judgment.The proposed advertisement may

be in a conceptual, rather thanfinal, form. The submission mustcontain an advertising schedulethat starts no later than 27 March201626. By starting theadvertisement’s run-time fourmonths ahead of the Rule 40period, the risk of the publicassociating the unofficial sponsorwith the Olympics will be reduced,relative to an advertising campaignthat starts when the Games begin.

Hypothetical case studyA recognised Brazilian athlete,Rodrigo the Great, living in Rio deJaneiro and eligible for the nextOlympic Games, through hissponsor, a sportswear company,sends to the Brazilian OlympicCommittee (‘COB’), three waiverrequests for the following billboardcampaigns, which will run throughthe Rule 40 period:

� The first campaign featuresRodrigo standing against apanoramic view of Rio de Janeiro,wearing street clothes made by hissponsor that is neither an IOC noran NOC partner. The campaignwill take place in Brazil only.

� The second campaign isidentical to the first, except that thecampaign will take place in the

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permissive general rule and thenwhittle away at that permissionwith numerous procedures,exceptions, and caveats thatultimately render the general rulemeaningless. The general rulepermits an Olympian to advertisewith an unofficial sponsor, so longas the advertisement does notdirectly or indirectly create the‘impression of a commercialconnection’ between the unofficialsponsor and the Olympics17.Once an Olympian submits a

waiver request to the pertinentNOC, the NOC has 21 calendardays to ‘answer.’18 The NOC mustdetermine whether the proposedadvertisement campaign createsthe prohibited commercialconnection and considers a list offactors, including a list ofprohibited ‘terms’ and ‘expressions’,such as ‘Olympic’, ‘Rio’, ‘2016’, and‘Medal’, to name but a few19. If awaiver request survives thisgauntlet, then the NOC has yetanother mechanism to axe therequest: the NOC is entitled towrite its own additional rules anddeny the waiver request on thatbasis20.The potential lack of

transparency in the decisionmaking process demands closeattention. According to theGuidelines, the NOC must informthe IOC and provide its reasoningonly when the NOC grants awaiver21. Apparently, the IOC wantsto be informed only when an NOCgrants a waiver, but not when itdenies one. Allowing an NOC todeny a waiver request without theaccountability of having to give areason contravenes basic principlesof fairness and justice.

Substantive flawsThe Guidelines prohibit unofficialsponsor’ advertisements that eitherdirectly or indirectly create theimpression of a commercialassociation with the Olympics22.

Christopher M.Delp

United States only.� The third campaign takes

place back in Brazil, exceptRodrigo is wearing the sportswearcompany’s sports apparel, asopposed to street clothes.The COB make a decision on the

first and third billboard campaigns,but will transfer the second requestto the USOC.The COB and the USOC’s,

decision making process willdetermine whether thesecampaigns are directly or indirectlyassociated with the Olympics. Inthis hypothetical case study, directassociation is excluded because theIOC’s intellectual property appearsin none of the three campaigns.The question to be answered on acase-by-case basis is whether thecampaigns create an indirectassociation between the unofficialsponsor and the Olympics.Is Rodrigo’s first campaign, the

street clothes campaign in Brazil,indirectly associated with theOlympics and therefore bannedunder Rule 40? One might thinkthat it would not be, since theimage of Rio de Janeiro is notcoextensive with the scene of thecity itself, which comprehendsmuch more than the Games thatwill take place there. LocalBrazilian viewers would notinstantly think of the Olympicswhen they see an image of theirown city. But what if the billboard’sdominant colours are the same asthe Olympic flag? The COB coulddeny the waiver request ongrounds that the campaign couldgenerate confusion among thegeneral public and unconsciouslycreate an association with theOlympics. This underscores thatone small factual nuance couldlead to drastically divergent results.Is Rodrigo’s second campaign, the

US street clothes campaign,indirectly associated with theOlympic Movement? While ascenic image of Rio de Janeiro

would not be instantly associatedwith the 2016 Games in the mindsof Brazilians, the USOC might finddifferently regarding scenes of Riode Janeiro displayed in the UnitedStates. Americans might morequickly associate the image of Riode Janeiro with the OlympicGames. Naturally, denying thewaiver request on these groundswould preclude a much broaderrange of advertising content thanwhat would have been permissibleunder the first campaign.Moreover, the expansive range ofreasons to possibly deny a waivermight provide cover for aneconomic motive to deny therequest, such as anti-competitivefavouritism toward an IOC orNOC partner company.In Rodrigo’s third campaign, the

sports uniform campaign back inBrazil, the change in clothingmight tip the COB toward denyingthe waiver request, because, similarto sharing the colours of theOlympic flag, the sports uniformmight make a strong associationwith the Olympic Games inviewer’s minds. Other factorsmight include whether Olympicvenues are visible in thebackground panorama of Rio deJaneiro.

ConclusionWhile it is clear that no NOC willgrant a Rule 40 waiver for anadvertisement displaying Olympicintellectual property - as suchwould create a direct associationbetween the unofficial sponsor andthe Olympics - the Guidelines’ lackof interpretive guidance rendersunpredictable how the NOCsmight decide all the cases that mayor may not have an indirectassociation with the Olympics.Absent an amendment or repeal ofRule 40’s text itself, the IOC shouldissue more definitive direction onhow to decide cases that presentthe question of indirect

association. Failing any of thesemeasures, the IOC should at leastconvene after the 2016 Games andexamine the impact of theGuidelines on Olympic intellectualproperty. If, however, ultimatediscretion is left to the variousNOCs themselves, this could giveway to abuse, and London 2012’sgreat ‘#WeDemandChange’campaign could easily become Rio2016’s ‘#WeDemandClarification’campaign!

Alessandro Oliverio PartnerChristopher M. Delp Of CounselOLF Law Firm, Romeoliverio@isportlaw.com

1. Intl. Olympic Committe, OlympicCharter (Aug. 2, 2015).2. Olympic Charter, sup n.2 at 79, r.40:3.3. See U. N. Carolina Dept. Commun.Stud., IMCHawks, Ambush Marketing,Rule 40, and the Sochi Controversy YouAren’t Hearing about, (5 Feb. 2014).4. Ibid, sup n. 4.5. Ken Belson, Olympians Take to Twitterto Protest Endorsement Rule, N.Y. TimesB11 (31 July 2012).6. Assoc. Press, USAToday.com, IOCRelaxes Rule on Athletes, Sponsors.7. Olympic Charter, sup n.2 at 79, r.40:3.8. Ibid.9. See lOC cit 3, sup n. 4.10. Assoc. Press, FoxNews.com,Olympians Tiptoe around SponsorshipBan, http://www.foxnews.com/sports/2014/02/18/in-sochi-athletes-tiptoe-around-olympics-sponsorship-ban-ioc-says-open-to, 18 Feb. 2014.11. See lOC cit 3, sup n.4.12. Olympic Charter, sup n.2 at 13.13. Belson, supra n. 6.14. Olympic Charter, sup n.2, 79, r.40:3.15. Guidelines, supra n. 10 at ¶ A.16. Ibid. at ¶¶ B–C. of the Guidelines.17. Ibid. at ¶ A(1).18. Ibid. at ¶ B.19. Ibid. at ¶ C.20. Ibid. at ¶ E21. Intl. Olympic Comm., Guidelines forNOCs Regarding Rule 40 of the OlympicCharter § 2.2.2; Feb. 2014. Available at:http://www.olympic.org22. Guidelines, sup n.10 at ¶ A(i).23. Loc cit 15, sup n.25.24. But see ibid. at § 5. 25. Infra PartIV.25. Ibid.26. Ibid.

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Allowing anNOC to denya waiverrequestwithout theaccountabilityof having togive a reasoncontravenesbasicprinciples offairness andjustice