New laws to protect the revenue of the 2012 Olympic and Paralympic Games have attracted some heated exchanges, with the Institute of Practitioners in Advertising describing the laws as “draconian, flawed and unwarranted”; the Newspaper Society claiming that the Hackney Gazette could be barred from publishing at all during the Olympics; and others expressing concern that individuals will be sent to prison for using the words ‘gold’ and ‘2012’ in a sentence. The opposition is misconceived. After its second reading before the House of Lords last week, the London Olympic Games and Paralympic Games Bill is now at the committee stage and is likely to be passed.

The Games are now a massive undertaking and are only financially possible for most host cities through maximising sponsorship revenue. Sponsors are more willing to participate when their sponsorship money buys access and exclusivity, so the International Olympic Committee requires host cities to put in place firm laws to protect sponsors’ rights.

On the other side to the sponsors are the ambush marketers, intent on increasing their sales through association with the Olympics while not paying for that privilege. As ambush marketers have become more creative, the legislature has had to respond.

The London Olympics Bill, modelled on similar legislation from Athens 2004 and Sydney 2000, was launched only a couple of days after the announcement of London’s winning bid. The London Olympics Bill creates a new IP right – the London Olympics Association Right. It is this that has been described as excessive.

The right allows the London Organising Committee for the Olympic Games to authorise sponsors and commercial partners to associate themselves with the games, and provides for fines and prison sentences for acts of unauthorised association. It is designed to catch those who seek an association with the Olympics that they have not paid for, without having to list exhaustively all the ways ambush marketing could be illegal.

By way of an example, for the Sydney Olympics the official airline, Ansett, was outfoxed by rival Qantas. Through sponsorship of Olympic athletes, such as Australian runner Cathy Freeman, Qantas used athletic imagery in its advertising without referring to the Games explicitly. Surveys showed a majority of Australians thought Qantas was the official airline, not Ansett. Following a particularly brazen advertisement shortly before the Games, Ansett commenced Federal Court proceedings. The action settled, but Qantas’s ads thereafter carried an acknowledgement that Qantas was not an official Olympic sponsor.

Modelled on the law in place for Sydney 2000, the London Olympics Association Right creates a presumption of association when certain combinations of words are used – ‘games’ with ‘summer’ or ‘2012’ with ‘gold’. However, an offence will not be committed where the Olympics is irrelevant to the context in which the words are used, such as a Sotheby’s catalogue offering a Greek bronze statue for £2,012.

The bill also allows the Secretary of State to make regulations controlling advertising in the vicinity of Olympic venues and traffic routes. This regulation, which is as yet unmade, is designed to prevent unauthorised advertising at the venues, such as sandwich boards at the stadium or fly-pasts at the rowing, as well as at the major transport hubs. For the Sydney 2000 Games, similar broad powers led to a hoarding and hassle-free Games. Touting Olympic tickets is also expressly made unlawful.

The London Olympics Bill is a realistic and proportionate response to the increasing problem of ambush marketing. If we are to have a spectacular Games, we must protect the hand that feeds them.

David Stone, partner, Howrey