While pandemic-related uncertainty lingers over whether the 2020 Summer Olympics will begin as planned in July, the numerous entities with financial stakes aren’t waiting to enforce legal rights.
Take Team USA and the U.S. Olympic and Paralympic Committee. On Tuesday the USOPC filed a complaint against Puma in Colorado federal district court. The nonprofit USOPC, which oversees the U.S. Olympic delegations, also owns trademarks that are now in dispute with the German footwear and apparel company. The litigation is reflective of the value the Olympic Games hold to the IOC, its members and sponsors across the globe.
USOPC argues that Puma is infringing and ambushing on its marks and causing confusion among consumers as to the USOPC and Puma’s respective roles. USOPC stresses it owns trademark registrations for TOKYO 2020, BEIJING 2022 and PARIS 2024. It has also entered into sponsorship and licensing deals with companies to promote both those marks and the USOPC’s involvement. In a statement released to Sportico, USOPC says Puma is engaged in “shocking” conduct that involves a plan to “willfully undercut critical funding for athlete training and programs.”
Puma’s Olympics-related marks are noticeably similar, though still clearly tied to Puma. Puma, which the USOPC forcefully describes as “declaring war” on its marks, filed for the mark PUMA Tokyo 2021 on March 24, 2020—the same day the IOC announced the delay of the Olympics. The mark would cover apparel, athletic equipment and bags. The company would later file trademark applications for PUMA BEIJING 2022 and PUMA PARIS 2024. Puma has also initiated cancellation actions at the Trademark and Trial Appeal Board (TTAB) against USOPC marks.
Puma, for its part, has sponsored a number of national Olympic teams at prior Games, including Jamaica and Cuba. It also works on a personal level with many athletes, most notably sprinters Usain Bolt and Asafa Powell.
The motivation here for Team USA, and the larger Olympic movement, is largely financial. The ability to use marks associated with specific Olympic Games is a valuable right that commands top dollar from global corporations. Part of that value is in the scarcity of the right—only the IOC’s top-tier global partners are allowed to use those marks, which the lawsuit calls “the most valuable and coveted of the Olympic Games trademarks.”
That top tier currently consists of 15 companies, including Coca-Cola, Visa, Toyota, Alibaba and Intel. From the four-year cycle from 2013-2016, the IOC brought in $1.03 billion from those marketing rights, making it the second-biggest revenue bucket, behind $4.16 billion from broadcast rights.
As Team USA sees it, Puma’s actions threaten to upset the value of those rights, and that money is critical to helping fund the Olympic movement, not just in the U.S., but around the world.
To that point, the USOPC’s complaint stresses that the Olympics are rife with opportunities for “ambush marketing.” Such marketing occurs when a company that is not an official sponsor attempts to associate itself with the Games in hopes that consumers will assume it is, or might be, a sponsor. This conduct is damaging on several levels, including for the Olympics and its associated entities (like the IOC and Team USA) that generate revenue through sponsorships. The value of those sponsorships diminishes if they can’t be protected from ambushers. Similarly, a company is less likely to pay for a sponsorship if rival companies can gain comparable notice of consumers through ambushing.
Trademark registration provides the USOPC with a number of legal benefits. Most relevantly to USOPC v. Puma, registration carries a presumption of ownership and the exclusive right to use marks. Other benefits include the possibility of treble damages (actual damages automatically multiplied by three) and anti-counterfeit protections.
The USOPC’s complaint paints Puma as violating both federal and Colorado laws. Several of the claims concern the federal Lanham Act, which makes it illegal to engage in trademark infringement and other acts that would lead to consumer confusion about the source of marks. Puma’s use of marks that are similar to the USOPC’s, the nonprofit contends, could lead to public belief that Puma is a sponsor of the USOPC, which it is not. Another claim draws on the Colorado Consumer Protection Act. The USOPC notes the Act prohibits business activities that are likely to deceive consumers as to whether those activities are licensed or endorsed.
The USOPC demands a jury trial and court orders that would, among other things: (1) determine that Puma has used infringing marks and order Puma to abandon those marks; (2) restrain both Puma and businesses under its control from commercially using infringing or “confusingly similar” variations of those marks; (3) cancel administrative proceedings before the TTAB; (4) award the USOPC trebled monetary damages for willful infringement; and (5) award the USOPC punitive damages to sufficiently punish and deter Puma from any subsequent unlawful acts.
As with any complaint, there are two sides to the story. Puma will have an opportunity to answer the complaint and offer defenses. It is likely the company will maintain that its actions are lawful and consistent with those of a publicly traded, for-profit business that seeks to maximize its shareholders’ interests. Puma will likely contend that its marks are lawful, and—as it has done before the TTAB—claim the USOPC is the infringer.
Representatives for Puma and the IOC didn’t immediately respond to emails seeking comment.