As an intellectual property lawyer and avid sports fan, I’m always interested in a case involving the legal intersection between sports and IP. There are plenty of IP issues facing the sports industry. Like any other industry, it’s driven by money, much of which is generated from IP. From licensing of team names and logos, to broadcast and sponsorship rights, to merchandise deals, IP plays a large role in the value of the sports industry.
A recent article by the World Intellectual Property Organization estimates global revenue from sponsorships, gate revenues, media rights fees to reach $133 billion in 2013. This figure does not account for revenue generated from the sale of athletic footwear and apparel, estimated at $300 billion worldwide.
It’s no surprise then that athletes, teams and sports organizations go to great lengths to protect their IP. This article provides a summary of current IP issues facing the sports world and the potential impact on the multibillion-dollar industry.
Counterfeiting flourished over the last several decades due largely to the availability of better and cheaper technology to facilitate copying. The sports industry took a significant hit from increased counterfeiting. From counterfeit tickets to knock off jerseys, IP owners fight a rigorous war to rid the market of fake goods. A 2011 survey by MarkMonitor revealed an astonishing 56 million annual visits to suspected counterfeiting websites and annual sales of almost 1.2 million suspicious jerseys.
Brand owners are fighting the proliferation of counterfeit products and tickets with comprehensive counterfeit plans, and federal officials have also stepped up their game. In July 2012, Homeland Security Investigations and U.S. Immigration and Customs officials joined forces to roll out “Project Copycat,” targeting websites selling counterfeit goods. The program has shut down approximately 70 websites for allegedly selling fake National Football League, National Basketball Association, Major League Baseball, National Hockey League and National Collegiate Athletic Association jerseys.
Defending the Domain (Name)
The battle over the Internet raged on with sports organizations filing suit to stop unauthorized use of their names within domain names over the past year. As an example, in Cleveland Browns Football Co. LLC v. Dinoia, the NFL franchise filed an arbitration proceeding against an individual from Italy regarding registration of the domain name browns.com. The Browns relied on its trademark rights in the marks "Cleveland Browns," the "Browns" and other trademarks incorporating “Browns.”
The complaint alleged that the browns.com domain name was identical to the trademark "Browns" and confusingly similar to the "Cleveland Browns" trademark, that Dinoia had no legitimate rights or interests in the domain and that it was registered and used in bad faith. The World Intellectual Property Organization agreed and ordered that the domain be transferred to the Browns organization. WIPO Case No. D2011-0421 (2011) (Trotman, Clive, Arb.).
Similarly, the National Football League sued EE Nation over its registration of superbowlconcierge.com. NFL v. EE Nation, WIPO Case No. D2011-1228 (2011) (Gibson, Arb.). The NFL, which aggressively protects its "Superbowl" trademark, filed an arbitration proceeding against EE Nation alleging that its registration and use of the domain superbowlconcierge.com without NFL authorization or consent violated its trademark rights.
The NFL relied on EE Nation's unauthorized use of NFL logos and pictures of NFL teams, as well as the display of links for booking rooms at hotels near NFL stadiums and purchasing tickets to NFL games, to support its claim that the domain was being used in bad faith. WIPO agreed, finding that the domain was identical to the NFL's trademarks, that EE Nation had no rights or interests in the domain, and that it had been registered and used in bad faith. The panel ordered the domain name superbowlconcierge.com to be transferred to the NFL.
In Pacific-10 Conference v. Lee, the Pac-10 conference (now the Pac-12) filed an arbitration action relating to a third party’s registration of the domains pac-12network.com, pac12network.com, and pac-12network.org. WIPO Case No. D2011-0200 (2011) (Sorkin, David, Arb.). The domains were registered following the PAC-10’s announcement that it was considering expansion of the conference to 12 teams.
The conference relied on its rights in various "PAC-10" formative trademark registrations, claiming they constituted a “family of trademarks,” and its pending federal trademark application for “PAC-12.” The conference argued that the domain names were confusingly similar to its trademarks, that the respondent had no rights or legitimate interests in the domains, and that Lee registered and used the domain names in bad faith. The panel agreed and ordered that the domains be transferred to the conference.
Rookie athletes have become increasingly savvy about protecting their IP. They recognize that their value involves much more than a playing contract amount - it’s about the commercial exploitation of their name, image and likeness. This explains why almost all up-and-coming athletes work to build and maintain their “brand.”
As examples, in 2012, the highly touted college quarterback Robert Griffin III (now starting quarterback for the Washington Redskins), filed federal trademark applications for "RGIII," "RG3," "Robert Griffin III" and "Unbelievably Believable," and star Kentucky basketball player Anthony Davis filed applications to protect "Fear the Brow" and "Protect the Brow," in reference to his “trademarked” unibrow.
College Football’s Battle of the Birds
In a battle that was not played out on the gridiron but instead was fought in the Trademark Trial and Appeal Board, the University of Iowa (my alma mater) opposed The University of Southern Mississippi’s federal trademark application for an eagle head design on the basis that it was confusingly similar to Iowa’s hawk head design. The University of Iowa and The Board of Regents, State of Iowa v. The University of Southern Mississippi, Opposition No. 91164745 (July 29, 2011) [not precedential].
The Trademark Trial and Appeal Board found in favor of the University of Iowa and sustained its opposition to registration of Southern Mississippi’s eagle head design. The TTAB held that the similarities between the marks outweigh the minor differences. The TTAB also focused on the consumer recognition of Iowa’s logo based on nationwide coverage of Iowa sports, and the overlap in the parties’ goods and channels of trade. Id. at 20-21.
Regarding degree of consumer care at the time of purchase, the TTAB noted that although loyal fans may be able to distinguish between the schools’ logos, other persons may not be “necessarily attuned to minor differences between somewhat similar sports teams’ logos.” Id. at 26.
Southern Mississippi argued that the coexistence of various bird-head designs as collegiate mascots significantly narrowed Iowa’s scope of protection for its Hawkeye design. The TTAB disagreed and found that "Iowa should be able to establish a reasonable zone of protection around its Hawkeye marks in spite of the existence of many other representations of bird heads." Id. at 37.
Harsh Reality about “Reality”
Another hot topic in the world of sports is rights of publicity. Rights of publicity relates to one’s ability to control the commercial use of his or her identity. In 2011, NBA star Gilbert Arenas (currently in a contract dispute and considering playing in China for the 2012-2013 NBA season) sued Shed Media, producer of the reality show "Basketball Wives: Los Angeles" for various causes of action, including misappropriation of likeness and rights of publicity. Arenas v. Shed Media US Inc., CV 11-05279 (C.D. Cal. 2011). Basketball Wives features a cast of women who have or have had romantic relationships with professional basketball players. Id. at *2.
Arenas sued Shed over its casting of his ex-fiance on the show. Arenas sought injunctive relief to enjoin Shed from using his trademarks in association with the show, and if his ex-fiance appeared in the show, to prevent Shed from using “Basketball Wives” or any other term that would suggest affiliation with basketball players in the title, and from suggesting in any way any affiliation with basketball players. Id. at *6-7.
Under California common law, to demonstrate that one’s right of publicity was violated, you must demonstrate: (1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of one’s name or likeness to one’s advantage; (3) lack of consent; and (4) resulting injury. Id. at *7.
The court first addressed the issue of whether Arenas’ ex-fiance’s “likely on-air conversations about Arenas (and any future promotional materials relating thereto”) constitute the use of Arenas’ identity as a celebrity. The court ruled that it does. The court also held that it was highly unlikely that Arenas’ ex-fiance would refrain from discussing Arenas or her relationship with Arenas, and therefore, Shed was likely to appropriate from the use of Arenas’ identity in connection with the show. Id.
Despite these findings, the court held that Shed had asserted two valid defenses, both stemming from the First Amendment. First, the court held that Shed offered proof that the show's value does not “derive primarily” from Arenas' celebrity status. Id. at *14. The court found that any references to Arenas would be “incidental to the show’s plot as a whole.” Id.
Shed also offered a public interest defense, stating “no cause of action will lie for the publication of matters in the public interest, which rests on the right of the public to know and the freedom of the press to tell it.’” Id. at *16. Arenas argued that discussion of his family life is not sufficiently related to his celebrity status “to render [the show]’s use of his identity a matter of public concern.” The court disagreed with Arenas based on his own exploitation of his personal life through Twitter and other means, and dismissed Arenas' right of publicity claim and his motion for preliminary injunction.
Companies have become increasingly aggressive with sending demand letters and filing suit to stop the piracy of sporting events. J & J Sports Prods. Inc., the exclusive commercial distributor of the broadcast rights for certain boxing matches, filed over 700 lawsuits in 2011 alone. See, e.g., J & J Sports Prods. Inc. No. 1:10-cv-4258-WSD, 2011 U.S. Dist. LEXIS 25453 (N.D. Ga. March 14, 2011).
Although businesses are required to obtain a license from J & J Sports to broadcast the boxing matches events to patrons, investigation by J & J revealed that many businesses failed to do so. In an effort to obtain information, J & J sends investigators to various establishments that have not paid the required license fee but are promoting the bout. The investigator then monitors the establishment, determines how many patrons are viewing the fight, and determines how much money is being made from the broadcast. These tactics have helped J & J to gather the information necessary to file suit for damages and lost profits based on the alleged interception and transmission of these events. The reason for being so aggressive is simple - J & J must protect its revenue stream.
Put on Your “Game” Face
In Hart v. Elec. Arts., Inc., plaintiff Ryan Hart, a former college football player at Maryland, brought a putative class action against Electronic Arts, the producer of a videogame series called NCAA Football. 808 F. Supp. 2d 757 (D.N.J. 2011). In his complaint, Hart alleged that Electronic Arts misappropriated his - and various other college football players’ - likeness and identity for a commercial purpose in connection with its video games. Electronic Arts filed a motion for summary judgment on the grounds that the First Amendment barred Hart's claims under New Jersey law for misappropriation of his likeness.
The court sided with Electronic Arts and held that the video game publisher may use college athletes' likenesses in its videogames because "there are sufficient elements of [Electronic Arts'] own expression ... that justify the conclusion that its use of the image is ... entitled to First Amendment protection." Id. For this reason, the court held that the First Amendment was a defense to Hart's right of publicity claim and granted Electronic Arts' motion for summary judgment.
8) Roll (Over) Tide
In one of the most eagerly anticipated decisions of this year, the Eleventh Circuit Court of Appeals issued its decision in the trademark infringement case between sports artist Daniel Moore and the University of Alabama. University of Alabama Board of Trustees v. New Life Art Inc., 05-00585-CV-UNAS-RBP-W (11th Cir. June 11, 2012). The University of Alabama sued Moore for trademark infringement and related claims based on his portrayal of Alabama uniforms in paintings and prints.
For over three decades, Moore painted football scenes featuring the Crimson Tide. Moore’s paintings are very popular and have been reproduced as prints, calendars, on mugs and other articles. Id. at *3. During the first several years of painting these images, Moore had no relationship with Alabama. Id. From 1991 to 1999, Moore entered into several licensing agreements with Alabama to produce and market certain items.
In 2002, Alabama told Moore that he needed permission to depict the school's uniforms because they are trademarks. Moore disagreed and argued that he did not need permission because the uniforms were being used to “realistically portray historical events.” Id. Despite raising its objection, Alabama continued to sell Moore's unlicensed calendars in its campus stores and displayed several of Moore's unlicensed paintings.
The parties couldn’t reach an agreement, and in 2005 the University of Alabama sued Moore for breach of contract, trademark infringement and unfair competition. The district court held that the prior licensing agreements did not require that Moore receive permission to portray the university’s uniforms because they were not included in the definition of “licensed indicia.” It also found that the university’s colors had some secondary meaning “but were not especially strong marks on the trademark spectrum.” Third, it held that Moore’s depiction of the uniforms in his paintings and prints was protected by the First Amendment and constituted a fair use but that Moore’s depiction of the uniform on mugs, calendars and other “mundane products” was not protected by the First Amendment and was not a fair use. Id. at 7.
The Eleventh Circuit agreed that Moore’s depiction of the university’s uniforms in his unlicensed paintings, prints and calendars was not prohibited by the parties’ prior licenses. The court also held that paintings, prints, and calendars “do not violate the Lanham Act because these artistically expressive objects are protected by the First Amendment." Id. at 32.
Because the uniforms featured in the paintings are “artistically relevant to the underlying work, Moore never explicitly misled consumers as to the source of the items, and the interests in artistic expression outweigh the risk of confusion as to endorsement.” Id. at 32-33. Regarding the other products at issue in the dispute, the court found that record lacked evidence regarding Moore's portrayal of Alabama’s uniforms on mugs and other mundane items. Therefore, the court concluded that disputed issues of fact remained with regard to these items.
Sports, IP and money are not mutually exclusive. As long as consumers are willing to shell out big bucks for tickets, merchandise, and other sports-related items, players, teams and organizations will continue to use the legal avenue to protect their IP rights.
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