When David Adams, who runs a not-for-profit coffee shop and art gallery in the south London borough of Camberwell, learnt that the Olympic torch relay would be passing close by his shop, he decided to mark the occasion, as the shop frequently did with big events in the local community.

“We thought it would be quirky to have some bagels in the window to celebrate the Games,” he says. He knew there were restrictions on the use of certain words and the logo so ensured the five bagels weren’t interlinked, as the Olympic rings are. His precautions didn’t prove enough for local community wardens who demanded that he take the signs down, or face trading standards authorities. “I was surprised — we’re non-profit, run by a local charity and church, and we didn’t want to affiliate the Olympic logo or make money out of it, we wanted to celebrate the torch relay.”

There have been a number of other instances where small businesses have been targeted, such as a butcher to take down rings of sausages he’d hung up to celebrate London’s selection as host city. As London prepares for the grand opening ceremony of the Olympic Games on Friday, such incidents have put its rigorous championing of sponsor rights under the spotlight, raising the question of whether, in their efforts to protect sponsors from ambush marketing, organisers have gone too far and jeopardised the community’s participation in the Games.

Ambush marketing

Ever since sponsors were first brought into the Olympics back in 1984, the International Olympic Committee has been grappling with ambush marketing — the attempt by a non-sponsor brand to associate itself with the Games. Over the years the rules have tightened, while the onus on host countries to provide adequate legal protection to the sponsors has increased. Britain already had legislation protecting the Olympic logo, motto and various words, as required by the IOC, back in 1995, but in 2006 brought in a new legislation to deal with the Games it was set to host — the London Olympic Games and Paralympic Games Act 2006.

The law toughened up protections against ambush marketing, and gave the organiser of the games, LOCOG, a special statutory “London Olympic Association Right” that went well beyond existing protections. It restricts the use of certain expressions or combinations of words: try to use any two of the following — “games”; “Two Thousand and Twelve”; “2012” or “twenty twelve” in combination with “gold”; “silver”; “bronze”; “London”; “medals”; “sponsor” or “summer,” and you’ll fall foul of the rules (though even more confusingly this is not an exhaustive list, the sponsor-police are able to exercise their discretion).

It also lowers the threshold of what counts as an attempt to create an association with the Games, while the penalties for falling foul of the laws can be severe, including an injunction, a claim for damages, and even criminal sanctions, says Mr Paul Geoghegan, a sports law solicitor at Morton Fraser. “In my opinion, the protections in place for London 2012 are the toughest yet.”

The stringent rules, which have also impacted suppliers of the games, have infuriated business organisations, which argue that they are out of step with the “spirit” of the Games. “Protecting the brand and the contracts they have with their sponsors is understandable. But this has no relevance to the draconian stance they are taking with their suppliers and small businesses,” says Mr Pierre Williams, a spokesperson for the Federation of Small Businesses.

Anger and derision

New details of the rights accorded to sponsors have been met with a mixture of anger and derision – from the restrictions that mean that only McDonald’s is able to serve chips on their own within Olympic venues while the number of cash machines has been reduced, and confined exclusively to Visa, the only type of card that will be accepted within the Games.

Just under 300 enforcement officers are set to patrol Olympic venues and the area around them to ensure no breaches of the rules.

The Chairman of LOCOG, Mr Sebastian Coe, caused an outcry last week when he told a BBC news presenter that a person wearing a Pepsi T-shirt to the Coca-Cola sponsored Games wouldn’t be allowed to enter the venue. A Minister subsequently “clarified” the situation, saying it was only groups of people and ambush marketing and not individuals that they were concerned about, but the damage was already done, confirming to many just how out of hand the sponsor protections have got.

“LOCOG have completely misjudged the public mood,” says Julian Cheyne of the Counter Olympic Network, a group of organisations critical of the dominance of sponsors. Indeed the overall backlash against sponsors has been fierce: a petition calling for sponsors to turn down the tax exemptions for Games revenues they had been given, attracted thousands of signatures. Several sponsors including McDonald’s and Coca-Cola said they wouldn’t be taking up the exemption, maintaining that their plan all along had been to waive it.

Meanwhile, some companies are eager to see how far they can push LOCOG. Bookmaker Paddy Power has issued a legal challenge to LOCOG’s demand that a series of its adverts be taken down. “Official Sponsor of the Largest Athletics Event In London This Year (Ahem, London France that is) the advert proclaims. “Can’t drink Pepsi, Police have to eat chocolate out of plastic bags, only McDonald’s can serve chips…hit LIKE if you think LOCOG are ridiculous,” the company’s Facebook page declares.

And later this week, another challenge will come from non-sponsor Nike, which launches its global “Find Your Greatness” campaign on Friday. A YouTube video already online shows “ordinary people” in places such as “London, Ohio” to “Small London, Nigeria,” doing everything from playing baseball to running a marathon. “Greatness is not in one special place,” the ad proclaims. London’s rigorous pursuit of sponsor rights may struggle to deal with the very type of ambush marketing – funny, irreverent and in tune with the public mood – that they least wanted to see emerge.

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