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Rule 40: The Debate Resurfaces in Singapore

The Rule 40 debate  has resurfaced in recent weeks, this time in the context of the upcoming South East Asia Games (“SEA Games”), which will be taking place in Kuala Lumpur later this month.  This time, the subject is Singaporean marathon runner Soh Rui Yong who has been issued with a formal warning by the Singapore National Olympic Council (“SNOC”) following a series of heated Facebook posts.  Soh Rui Yong has since issued an apology to SNOC and has removed the offending posts.

Protecting official sponsors: what is “Rule 40”?

In order to protect the investment of official Olympic sponsors who have shelled out hundreds of millions for the privilege (90% of which is reinvested into the Games according to the IOC), the IOC uses two key tools.

First, it utilises a portfolio of registered trade marks (including, for example, more than 9 UK registrations and over 100 EU registrations), as well as other intellectual property rights (often reinforced by specific legislation in hosting countries, as was the case for London 2012).  The list of terms the IOC polices in relation to the Olympics includes the obvious (“Olympic” and “Olympic Games”) and some arguably not-so-obvious ‘Oympic-related’ terms including “Rio”, “Summer”, “Effort”, and “Performance”.  A brand using any of these to attach itself to the Olympic hype and grab the attention of the massive Olympic audiences risks an infringement (though brands have found increasingly inventive and sophisticated ways to toe this line).

The second tool the IOC uses is Rule 40 (and the Bye-law to Rule 40) of the Olympic Charter, which requires athletes not to allow their image to be used for advertising purposes during a limited period either side of the Games.  This effectively prevents athlete sponsors from referring to their athletes during the Games, unless (following a relaxation of the rule this year) they have obtained prior approval from the relevant national Olympic association (though it is the athlete that takes the punishment for this).  Importantly, it is the athlete (rather than the brand) who is sanctioned under Rule 40.

The SEA Games and Rule 40

Article 30 of the SEAGF Charter and Rules (as repeated in the Kaula Lumpur Technical Handbooks) states as follows:

“To be eligible for participation in the SEA Games, a competitor must comply with the SEA Games Federation Charter as well as Rule 40 and the By-law to Rule 40 of the Olympic Charter (Participation in the Games).”

SNOC in turn requires athletes to comply with Rule 40 via its team contracts. According to SNOC’s Secretary-General, Chris Chan, the relevant clause provides that an athlete who infringes the blackout rule must “unconditionally comply with SNOC directions to remove all postings and uploads (as well as) sanctions and disciplinary proceedings”. Chan also explains that the IOC rules “have been developed by the International Olympic Committee which we constantly review, adapt and adjust to the relevance of our market.

Why is Rule 40 controversial?

The need to prevent ambush marketing is easy to understand but the rule also has the effect of preventing longstanding sponsors of individual athletes (who have often also invested substantial sums) benefiting from the athlete’s success.  This in turn reduces an athlete’s marketability to potential sponsors, particularly for athletes whose main period of exposure and commercial potential is tied to the Games.

Indeed, Soh reports having lost out on a sponsorship deal with an earphone company when he informed them of the blackout period.  Indeed, this aspect of the debate formed the basis of his posts:

“On 5 August 2017, [SNOC] started a blackout month for the 2017 SEA Games, ruling that Team Singapore athletes cannot mention brands on social media posts if they are not also sponsors of the SNOC. 

Sponsorship is already hard to come by for Singaporean athletes, and this rule makes it even harder for Singapore athletes to get the sponsorship and financial support which we require to train and compete at a high level.  Which company would be keen to sponsor athletes when they won’t be able to get any coverage during major games – the only instance that sports like athletics get eyeballs watching?

I respect the contract that the SNOC has with its sponsors, and as such will not mention non-SNOC sponsors from 5 August to 5 September.”

However, the athlete subsequently posted an ‘indirect’ reference to one of his sponsors, ASICS:

“That being said, I believe in paying homage to those who go you this far, so thank you to a Japanese shoe company that has sponsored me with shoes, attire, and many other things in my pursuit for a second gold medal in the SEA Games Marathon.  Can’t mention the brand name but it rhymes with basics.”

SNOC reacted to the post, making clear that it was an infringement of the rules, but offering to meet with the athlete to “hear him out”.  The meeting resulted in an apology from Soh Rui Yong for “inadvertently [making] SNOC seem like the bad guy”.  Certainly the rule stems from the IOC, yet it is interesting to note that SNOC appears to have opted not to follow the more relaxed approach recently adopted by the IOC.

Last year, ahead of the Rio 2016 Olympic Games, the IOC notably relaxed its approach to Rule 40, enabling athletes to apply to their NOCs in order to permit their existing sponsors to continue to run approved longstanding advertisements (providing they did not contain any reference to the Olympics) throughout the Olympic period.  Whilst the move was welcomed by athletes, it was also subjected to criticism as it predominantly benefited the more commercially successful athletes with longstanding sponsors and prominent, sophisticated marketing campaigns, whereas the date for notification of advertising materials to NOCs fell before the selection date for many sports, leaving some athletes unable to make use of the relaxation to fully capitalise on their Olympic selection and any subsequent success.

Notably, Soh referenced the IOC’s relaxation of Rule 40 in his apology post and expressed “hope that we can adjust our rules to align with the updated IOC rule 40 moving forward… but we’ll take that up after the SEA Games 2017.

Whilst such an approach would not have affected the position in relation to his potential sponsorship by the earphone company, as an athlete who appears to have a number of longstanding sponsors, it would potentially have enabled the continuation of existing campaigns with those sponsors through the blackout period.

For now, Soh will no doubt be concentrating on his performance at the Games.  But it appears that we can expect him to continue to make his voice heard on this issue in the future.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Rosie Duckworth, Squire Patton Boggs Law Firm, Intellectual Property Attorney
Associate

Rosie is an associate in the Intellectual Property & Technology Practice Group, based in London.

She has experience in both contentious and non-contentious commercial and intellectual property matters, advising clients in the sports, advertising, and media and entertainment industries.

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