Under the original bill, which the IPA branded "unreasonable", a list of words were prohibited when used in combination.
For example, if any advertiser were to use the line "Come to London in 2012", or "silver", "gold" or "bronze" in conjuction with "games" or "2012" it would count as an automatic infringement.
It is understood a defence clause for those unofficially associating themselves may be introduced so £20,000 fines are not slapped on innocent businesses or advertisers. The businesses in question will have to prove the banned terms were a "statement of fact".
Culture secretary Tessa Jowell also hinted the Department for Culture, Media and Sport may be about to change some points regarding the bill in an interview with Media Week.
"We will have to take it on a case-by-case point," she said.
Jowell also remained firm that those companies attempting to profit by unofficially associating themselves with the games will not do so after the bill is passed.
"But what I say to those small businesses is that we are absolutely determined that the application of this rule will be proportionate, that they will not be allowed to imply that they have a commercial association with the games if they do not," Jowell added.
Olympic sponsors including Coca-Cola, McDonald's and Johnson & Johnson have signed multimillion-pound deals with the IOC to ensure they can be one of a limited number to use the Olympic trademarks and associate their brands with the London 2012 Games.
The IOC will work closely with the government to ensure these needs are met.
The Olympic bill is going to committee after recess on October 10 and is due to be completed by October 20.
Chris Hackford, legal manager at the IPA, said: "We are aware that some amendments have been made to the bill although implications are that these relaxations are minimal."
The DCMS refused to comment on the bill before October 10.
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