The owners of The North Face outerwear brand have paid to settle a legal dispute with the Canadian Olympic Committee over a line of unauthorized Olympic-themed clothing.
On Tuesday, the COC announced that it had resolved litigation against VF Outdoor Canada Co., the Canadian arm of North Face parent company VF Outdoor Inc. The company has agreed to make "a significant donation" to the Canadian Olympic Foundation, the registered charity affiliated with the COC.
The dispute was over a line of "Villagewear" that North Face launched in November, 2013, and marketed in Canada during the Winter Games in Sochi, Russia: Some clothing featured a patch with the symbol "RU/14." A T-shirt was sold with the date of the opening ceremonies . Other merchandise was decorated with a world map, and a red star marking Sochi's location; and included names such as "Men's Sochi Full Zip Hoodie" and "Women's Sochi Pullover Hoodie." Its advertising included statements such as "Support Canada with patriotic gear."
The COC threatened legal action at the time because The North Face was not a sponsor of Team Canada. Sponsorship deals typically involve multimillion-dollar investments over a number of years. In exchange, the COC guarantees to its sponsors that other companies will not have the right to suggest an Olympic connection in their advertising.
Some companies attempt to get around this with "ambush marketing" – suggesting a link to an event when they haven't paid for official sponsorship.
In January, 2014, the COC sent a cease-and-desist letter to the company specifying actions it could take to avoid litigation, including publicly clarifying that it is not an official sponsor; pulling any slogans that referred to the Games; and making a donation to the Olympic foundation. When the company did not act, the committee filed a trademark lawsuit in Vancouver on Feb. 4, 2014.
The COC sought an injunction to prevent The North Face from advertising that suggested an Olympic connection, and from passing off any products in a way that suggested they were COC-licensed. It also asked for accounting of the profits from the merchandise, and damages in that amount. The lawsuit has been ongoing since then, and recently reached a settlement.
During the Sochi Games, The North Face sponsored the U.S. Freeskiing team and made their uniforms, but did not sponsor the COC or any Canadian national sport foundations or teams.
"Some Canadian consumers may have mistakenly believed The North Face's sponsorship went beyond the U.S. Freeskiing Team, and we regret if that was the case," the company said in a statement on Tuesday. "VF Outdoor Canada and its The North Face brand deeply respect the Canadian Olympic Committee and the valuable work it does to support Canadian athletes at all levels of sport and as a result, we are proud to make a significant donation to the Canadian Olympic Foundation."
The North Face launched the clothing collection with a release saying that it was intended to celebrate "the excitement of the upcoming competition in Sochi, and the stage it has created for the world's elite winter athletes in 2014."
The COC said it had also found the collection displayed in a Sporting Life store in Toronto with a drawing of the Olympic rings – the use of which is strictly limited to sponsors.
The company also ran a contest at the time offering a trip for two "to Sochi … to attend a major international sports competition, February 19, 2014 – February 23, 2014" among other prizes. Such ticket transfers required permission as specified by the terms printed on the back of the tickets, according to the COC.
"The ambush marketing challenge against the Olympic brand … is maybe as big as exists in sport," Chris Overholt, chief executive of the Canadian Olympic Committee, said in an interview at the time. "It's got great content, great storylines, and as a result, many would like to be attached to it."
The COC has been loosening its rules limiting advertising around the Games in recent years. Just before its dispute with The North Face, ahead of the Sochi Games, the COC worked with Tim Hortons Inc. to allow it to run an ad featuring hockey star Sidney Crosby without suggesting an Olympic connection. Last year, the International Olympic Committee officially made changes to Rule 40 of the Olympic charter, which gives exclusive advertising rights to sponsors such as Visa Inc. and McDonald's Corp. (or country-level sponsors such as BCE Inc. and Canadian Tire Corp. Ltd. in Canada) during a blackout window around the Games. Under the new rules, non-sponsors can still feature ads with individual athletes they sponsor, without having to ink more expensive deals with the COC.
However, non-sponsors are still prohibited from using any Olympic terminology in ads, including "gold," "medal," "Olympics," "Games," and the name of the host city; and they cannot use logos such as the Olympic rings.
With the rise of social media, there have been more instances of companies skirting the line in their use of Olympic language and imagery. Such restrictions only apply to commercial activities, not to posts by individuals on social media. The COC has a team of people who speak with companies directly to resolve the issue if their social media posts or other marketing activities seem to be suggesting a connection to the Olympics without being a sponsor.
"It is something that is very rare, a case like this. Our first line of defence is certainly not litigation," said Erin Mathany, director of strategic partnerships at the COC. "… Without our sponsors we are not able to invest in the sports system. We're taking every precaution necessary to protect those investments."