U.S. Olympic Committee v. Intelicense Corp., S.A., s. 1324

• Decision Date: 05 November 1984
• Docket Number: Nos. 1324,1331,D,s. 1324
• Citation: 737 F.2d 263,222 USPQ 766
• Parties: UNITED STATES OLYMPIC COMMITTEE, Plaintiff-Appellee, v. INTELICENSE CORPORATION, S.A., International Sports Marketing, Inc., Defendants-Appellants. INTERNATIONAL SPORTS MARKETING, INC., INTELICENSE, S.A., Plaintiffs-Appellants, v. UNITED STATES OLYMPIC COMMITTEE, Defendant-Appellee. ockets 83-9025, 83-9063.
• Court: U.S. Court of Appeals — Second Circuit

Page 263

737 F.2d 263

222 U.S.P.Q. 766

UNITED STATES OLYMPIC COMMITTEE, Plaintiff-Appellee, v. INTELICENSE CORPORATION, S.A., International Sports

Marketing, Inc., Defendants-Appellants.

INTERNATIONAL SPORTS MARKETING, INC., INTELICENSE, S.A., Plaintiffs-Appellants, v. UNITED STATES OLYMPIC COMMITTEE, Defendant-Appellee.

Nos. 1324, 1331, Dockets 83-9025, 83-9063.

United States Court of Appeals, Second Circuit.

Argued May 30, 1984.

Decided June 18, 1984.

Certiorari Denied Nov. 5, 1984.

See 105 S. Ct. 387.

Peter F. Langrock, Langrock, Sperry, Parker & Wool, Middlebury, Vt., for defendants-appellants.

Robert D. Rachlin, Downs, Rachlin & Martin, Burlington, Vt., for plaintiff-appellee; Richard G. Kline, Edward T. Colbert, Joseph D. Lewis, Beveridge, DeGrandi & Kline, Washington, D.C., of counsel.

Before FEINBERG, Chief Judge, KAUFMAN and PIERCE, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge.

We are asked today to decide whether the five-ring Olympic symbol can be commercially marketed within the United States without the consent of the United States Olympic Committee (USOC). While the roots of the Olympic Games can be traced to the first Olympiad held in Ancient Greece in 776 B.C., the temporal spectrum necessary to resolve this dispute is far more modest, extending over the six-year period since the promulgation of the Amateur Sports Act of 1978 (the "Act"), 36 U.S.C. Secs. 371-96. The fundamental purpose of that Act was to safeguard the USOC's ability to raise the financial resources that are a critical component of America's capacity to send world-class amateur athletes into international competition without the massive government subsidies enjoyed by competitors from other nations.

In view of the language and purpose of 36 U.S.C. Sec. 380 (Sec. 380), we hold that the USOC's consent is a prerequisite to marketing the Olympic symbol in the United States. Because appellant Intelicense Corp. (Intelicense) failed to secure USOC permission, we affirm the judgment of the district court enjoining Intelicense from commercially using the Olympic symbol in this country. We shall first set forth those facts pertinent to an understanding of this dispute and then proceed to discuss Intelicense's numerous legal arguments.

I

This case concerns the right of Intelicense, a Swiss corporation, and its sublicensee, International Sports Marketing, Inc. (ISM), a Vermont corporation, to use, market, and sublicense within the United States the official pictograms of the International Olympic Committee (IOC) without the consent of the USOC. The pictograms at issue are graphic designs of athletes participating in various summer and winter Olympic sports against a backdrop that explicitly incorporates the Olympic symbol, consisting of five interlocking rings.

In October of 1979, Intelicense entered into two agreements with the IOC. Under these agreements, Intelicense was granted the exclusive worldwide rights to be the marketing agent for the pictograms, acquiring 60% of the licensing revenues while the IOC would receive 40%. Moreover, as a prerequisite to marketing the pictograms in the territory of each National Olympic Committee (NOC), the agreements provided that Intelicense must first secure the approval of each NOC.

Over the course of the following year, Intelicense affirmatively sought to obtain this approval from the USOC. Negotiations between Intelicense's director, Stanley Shefler, and the USOC's Chief Executive Officer, Colonel F. Don Miller, however, failed to provide an accord. At trial, Colonel Miller testified that the Intelicense proposal for marketing the pictograms would "dilute the market in terms of the USOC's obtaining corporate sponsors" and would expressly contravene the USOC's money-making activities that are critical to the continued existence of the United States Olympic team. Accordingly, the USOC unequivocally refused to consent to Intelicense's proposal. Nevertheless, Intelicense proceeded to license the use of pictograms on products marketed in the United States. This prompted the USOC to file suit ¹ in 1982, demanding that Intelicense and its licensees cease and desist from contacting corporate sponsors in the United States.

Circuit Judge Oakes, sitting by designation in the district court, permanently enjoined Intelicense from using the Olympic symbol for the purposes of commercial trade within the United States, without the consent of the USOC. He concluded that Intelicense's failure to secure the consent of the USOC expressly contravened Sec. 380, as well as the 1978 version of the IOC charter, each of which requires USOC approval as a prerequisite to marketing or licensing any Olympic emblems or symbols in this country.

On appeal, Intelicense and ISM raise a litany of claims in an attempt to evade the strictures of Sec. 380. As we will explain, however, their efforts at statutory and semantical legerdemain are unsuccessful.

II

An understanding of this case is predicated largely upon a complete appreciation of the language and purpose of The Amateur Sports Act of 1978. ² This statute The relevant portions of Sec. 380 so essential to a determination of this case follow:

                enacted in 1978, empowers the USOC to exercise exclusive jurisdiction over all matters pertaining to the participation of the United States in the Olympic Games.  The Act further vests the USOC with the responsibility of financing the participation of the United States in the Olympic Movement.  Because the USOC is the only NOC that does not receive formal financial assistance from the Government, financing the United States Olympic team poses unique obstacles.  Consequently, the marketing of the Olympic symbol in the United States assumes great importance. 3   Protecting the value of the Olympic symbol was, therefore, a significant factor that led to passage of the Act.  See 124 Cong.Rec. H10,754 (daily ed. Sept. 26, 1978) (remarks of Rep. Danielson)
                

(a) Without the consent of the [USOC], any person who uses for the purpose of trade, to induce the sale of any goods or services, or to promote any theatrical exhibition, athletic performance, or competition--

(1) the symbol of the IOC, consisting of five interlocking rings; or ...

(3) any trademark, trade name, sign, symbol, or insignia falsely representing association with, or authorization by, the IOC or the [USOC] ...

shall be subject to suit in a civil action by the [USOC] for the remedies provided in the ... Trademark Act.

It is clear that the Congressional intent in enacting Sec. 380 was to promote the United States Olympic effort by entrusting the USOC with unfettered control over the commercial use of Olympic-related designations. This would facilitate the USOC's ability to raise those financial resources from the private sector that are needed to fund the United States Olympic Movement. One court has reasoned that a primary purpose of Sec. 380 was "to insure the market value of licenses." Stop the Olympic Prison v. United States Olympic Committee, 489 F.Supp. 1112, 1120 (S.D.N.Y.1980). The trial court here agreed, as has each court to have passed on the intent of Sec. 380. See International Sports Marketing, Inc. v. International Olympic Committee, and United States Olympic Committee, No. 83-44 (D.Vt.1983); United States Olympic Committee v. Union Sport Apparel, 220 U.S.P.Q. 526 (E.D.Va.1983); International Olympic Committee v. San Francisco Arts and Athletics, 219 U.S.P.Q. 982, (N.D.Cal.1982), aff'd, 707 F.2d 517 (9th Cir.1983); United States Olympic Committee v. International Federation of Body Builders, 219 U.S.P.Q. 353 (D.D.C.1982); United States Olympic Committee v. David Shoe Co., Inc., No. C-1-82-596 (S.D.Ohio 1982).

Because Sec. 380 is phrased disjunctively, a violation of any subsection properly animates the statute's panoply of remedial provisions. Intelicense claims, however, that because it is not falsely associated with the IOC, its conduct falls outside the proscriptive ambit of subsection (a)(3) and, therefore, cannot be reached by the remaining provisions of Sec. 380. But, such a construction constitutes a patent misreading of the statute and would render Sec. 380(a)(1), as well as the other subsections, superfluous. The view urged is contrary to this Circuit's established rules of statutory construction. See Allen Oil Co., Inc. v. C.I.R., 614 F.2d 336, 339 (2d Cir.1980) (a statute should be construed to give force and effect to each of its provisions rather than render some of them meaningless); see When viewed against the factual landscape present in the instant case coupled with Congress's intent in enacting Sec. 380 and the plain statutory language of subsection (a)(1), we cannot imagine a more blatant violation of the Act. Indeed, it is uncontroverted that Intelicense made commercial use of the Olympic symbol to induce the sale of goods in the United States, without having secured the consent of the USOC. ⁴ This is all that subsection (a)(1) requires. See International Olympic Committee v. San Francisco Arts and Athletics, supra.

also United States v. Blasius, 397 F.2d 203 (2d Cir.1968), cert. dismissed, 393 U.S. 1008, 89 S.Ct. 615, 21 L.Ed.2d 557 (1969); United States v. Dinerstein, 362 F.2d 852 (2d Cir.1966). Accordingly, a violation of Sec. 380 can properly be grounded upon a violation of subsection (a)(1) alone, notwithstanding Intelicense's exhortations to the contrary.

In an effort to circumvent the result clearly dictated by (a)(1), Intelicense contends that (a)(1) is not implicated in this action because the pictograms display the Olympic rings in conjunction with another design. But, this claim also is entirely without merit. There is absolutely nothing in the legislative history of Sec. 380, or elsewhere, to support the argument that the Olympic symbol loses its identity when combined with other elements. Moreover, such a strained reading of (a)(1) vitiates the very interests sought to be safeguarded by the enactment of ...