Mitigation of IPR Conflicts in Sports Law

The author Yamini Gurjar is a 5th-year student from Alliance University.

WHAT IS INTELLECTUAL PROPERTY?

Intellectual property is the creation of the human mind, such as inventions, literary and artistic works, trademarks, designs, and images which are valued by commerce.

Intellectual property is protected by Intellectual property laws. Copyrights, trademarks, patents, designs, etc. are among the forms of intellectual property available for proprietors. [1]

WHY SHOULD WE HAVE AN INTELLECTUAL PROPERTY REGIME?

Intellectual property is an intangible resource which has value to the person who owns the IP. The inventors and creators have invested capital and time into their Intellectual properties and such investments need to be protected by law to assure the growth of human knowledge and the overall growth of the human race.

INTELLECTUAL PROPERTY RIGHTS AND SPORTS

The intellectual property rights are applicable in almost all the factions of sports. Trademarks are used to distinguish products and equipment used by various sportspersons and designs help in establishing a unique identity of a particular brand or company. Copyrights are related to the broadcasting rights auctioned to broadcasting agencies across the world, strict implementation of the piracy laws related to copyright is a must since these broadcasts are a huge source of revenue for the event organisers and heavy investment from the broadcasters. Patents are relevant in the sporting equipment arena wherein newer technology can be introduced by sports apparel manufacturing companies.

Commercial exploitation of sports has been the major reason for IPR becoming an important issue for us to deal with, commercialisation of sports helped pave the way for increased revenue to the event organisers which trickled down to the teams participating in the event and as a natural result, led to increased income for sportspersons. Now IP rights are used as retailing tools for the branding of sports and related events to prevent any difficulties that may arise in the near future.

The commercialisation of sports also helped create superstar athletes like Cristiano Ronaldo, Lionel Messi, Michael Jordon, Kobe Bryant, Tiger Woods, Virat Kohli, etc. These athletes were able to cash in on their prowess in the specific field and gain a huge fan following as well as endorsement deals as a source of income. The protection of Intellectual Properties is a major requirement considering the growth and relevance of sports in the entertainment world.

WHEN CAN THERE BE AN IPR DISPUTE IN SPORTS?

In general, IPR disputes can occur regarding the products and equipment used in a sporting event. The copy or misuse of another competitor's design, technology or trademark can be a major contention for an IPR dispute in sports.

Otherwise, IPR disputes can arise in cases in the form of “ambush marketing” or unprovoked acts of player(s).

Ambush marketing is a term defined in the Oxford dictionary as “the practice by which a rival company attempts to associate its products with an event that already has official sponsors”. Ambush marketing strategies can be legal or illegal and can even have “grey areas” wherein they can be considered both legal and illegal depending upon whom you ask. [2]

While there are a plethora of cases of ambush marketing, the most stand out is the case between VISA and American Express. In this incident, VISA was the official sponsor for the Winter Olympics 1992 being held in France. As an official sponsor, VISA had set up advertisements in and around the town Albertville, France with the advertisement telling the viewers to keep their American Express credit cards at home since “the Olympics don’t take American Express”, it was a fact that the tickets and hospitality services during the winter Olympics did not accept American Express, but the same was not the case for other businesses in the area. American Express did not accept the dig by VISA and decided to respond with an advertisement campaign reassuring the cardholders who went to the French Alps “for winter fun and games” would be given better services by American Express than any other bank card. [3]

In another recent American case of IPR infringement, the sportswear giant Nike and a medium scale apparel company FUEL were engaged in a case concerning the trademark on Nike and their fitness bands. In the case of Fuel Clothing Company Inc. v. Nike Inc. [4]. The trademark for “FUEL” was owned by Fuel Clothing Co. and in 2012 they brought a claim against Nike for unfair competition and trademark infringement with regards to Nike’s new fitness tracker launch. Nike had used the term Nike + Fuelband for the wristband and had printed similar phrases on their promotional t-shirts. While Nike did have a trademark for “Nike + Fuelband” and “Nikefuel” in various categories of registration but not in the clothing category where Fuel held their trademark. [5]

The court gave a decision in favour of Nike and the ratio decidendi was that the Nike + Fuelband is not similar to the Fuel trademark and the Nike product was sold at an elevated price in comparison to Fuel Clothing Company. Even the products of both companies are different in function and aesthetics. The t-shirts with the taglines were accompanied by the famous NIKE and “swoosh” trademark which helps the customer to differentiate the Nike brand from other brands with ease.

HOW CAN THE IPR ISSUES IN SPORTS BE MITIGATED?

There are certain ways by which Intellectual Property Rights Conflicts can be mitigated in Sports Law.

• Thorough Strong diligence

One of the most important but underapplied aspects of intellectual property is due diligence. Due diligence work is carried out before purchase or registration to eliminate tortious liability. This is a very prominent step because not carrying out due diligence work or having a weak due diligence report can lead to tort claims from other parties which can have financial, and commercial repercussions apart from being time-consuming. In the sports world, this would imply that any trademark or design should be checked for infringement by the manufacturer to make sure that there is no overlap with another manufacturer or sports company.

• Stringent vigilance

Once a proprietor owns or has control over a particular intellectual property, they must make sure that no other party is infringing on their intellectual property. The vigilance work should be carried out by the owner during regular intervals of time and if any infringements are noticed then the infringing party must be made aware of their infringement along with a cease and desist letter. If the infringement continues even after such a warning, the owner can seek legal remedies for a recourse. In the sports industry, the brands are constantly in competition with each other and this can lead to one brand copying the other brands' intellectual property, hence a company needs to be aware of their competitors’ products and designs.

• Airtight employment contracts

Employment contracts with non-compete clauses are among the most universal methods of protecting intellectual property in competitive markets such as the sports industry. In employment contracts, the employers do not allow the employees from joining a competitor for a certain period after leaving their current employment. This setup helps protect the sensitive product and marketing information which is vital for the success of a brand or a product.

• Non-Disclosure Agreements and Confidentiality

The companies can also utilise a Non-Disclosure Agreement (NDA) and confidentiality clauses with their employees, suppliers, marketers, distributors, etc. to make sure that the information shared by the company to the parties is safe from other competitors.

• Strong Presence Of a Governing Body

A well-established and judiciously governed administrative body for any sport can help mitigate a lot of issues which may arise in the course of the events carried out under the guidance of the governing body. A strong governing body builds trust in the sports teams, the sportspersons, fans and the companies that are involved in the sport as well. Every major sporting event such as the English Premier League (football), the Indian Premier League (cricket) and the Super Bowl (American football) is a successful party because the governing bodies satisfactorily conduct their administration without bias or prejudice.

Strong and competent governing bodies can also avoid or adjudicate intellectual property conflicts albeit on matters such as broadcasting rights, kit and apparel sponsors, advertisements, etc.

CONCLUSION

With the ever-increasing popularity of sporting events which have changed teams to huge companies, brands to mega profit-making industries and sportspersons into superstars, the need for competent and thorough administration of Intellectual property is the need of the hour. The governments across the world must formulate and implement stringent intellectual property law regimes to avoid conflicts or competently adjudicate them. Even owners of the intellectual property should make sure that their work is not being infringed or being misused by other entities and if found out immediate action should be expected from such companies.

Disclaimer: This article is an original submission of the Author. Niti Manthan does not hold any liability arising out of this article. Kindly refer to our Terms of use or write to us in case of any concerns.

References:

[1] ‘About Intellectual Property (WIPO) <https://www.wipo.int/about-ip/en/>

[2] Dan Shewan ‘Ambush Marketing: What It Is & Why It Works’ (Wordstream, 5 March 2020) <https://www.wordstream.com/blog/ws/2018/04/04/ambush-marketing>

[3] Paul Deckelman ‘VISA, American Express battle with Olympic Ads’ (UPI Archives, 7 February 1992)

https://www.upi.com/Archives/1992/02/07/VISA-American-Express-battle-with-Olympic-ads/8877697438800/

[4] Fuel Clothing Company Inc. v. Nike Inc. [2014] D.S.C No. 3:2012cv00555- 139

[5] Robert Batterman ‘Fuel Clothing Co. Runs Out of Gas in Trademark Suit’ (National Law Review, 2 July 2014) <https://www.natlawreview.com/article/fuel-clothing-co-runs-out-gas-trademark-suit>