chapter

9

Intellectual Property Law

Chapter Objectives

After reading this chapter, you will know the following:

• The areas of intellectual property law that apply to sport

• The types of trademarks that are used in the sport industry

• Ways that a sport organization can protect itself when its trademarks, copyrights, or patents are used by others who are not authorized to do so

• The value that athletes have in their personal right of publicity

Sources of Revenue in Sport

• Tangible sources– Merchandise– Tickets– Concessions

• Intangible sources– Player or team name and likenesses– Sponsorship of events and facilities– Sale of merchandise with particular names and

logos

Definition of Intellectual Property

• Property rights over artistic and commercial assets– Musical and literary works– Discoveries and inventions– Words, phrases, symbols, and designs used in

commerce

• Provide creators with an economic incentive to develop works

Key Content Areas

• Trademark• Copyright • Right of publicity• Patents

Trademark

Any word, name, symbol, or device that an organization uses to identify and distinguish its services from the services of another organization and to indicate the source of the service

Trademark Law

• Trademark Act of 1946, known as the Lanham Act, governs the law of trademarks and their registration and provides causes of action that protect trademark rights from infringement

• Purpose is to protect the owner of a mark by preventing others from using the mark without permission or in a way that will cause confusion

Trademark Law: Dilution

• Dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services.– Blurring: A party uses or modifies a mark, resulting

in the weakening of the original mark to identify goods.

– Tarnishment: The mark is used in association with unwholesome or shoddy goods and services.

Functions of a Trademark

• Identifies a seller’s goods and distinguishes them from those sold by others

• Signifies that goods come from one particular source

• Indicates that products are of a certain quality

• Advertises, promotes, and assists in selling the particular goods

Uniqueness of Trademarks• Arbitrary or fanciful marks

– Inherently distinctive because they describe the source of a good and not the actual good itself

– Example is Nike

• Suggestive marks– Require some creativity to understand the product that they

describe– Example is Hot Pockets

• Descriptive mark– Describes a characteristic or quality of a good or service

– Not protected under trademark law

(continued)

Uniqueness of Trademarks (continued)

• Generic mark– Marks that are so common they cannot receive federal trademark

protection– Example is Jell-O

• Collective mark– Mark used by the members of a cooperative, association, or other

collective organization to indicate membership in that organization– Example is NBA

• Service mark– Mark used in the sale of advertising or services to identify and

distinguish the services of one entity from the services of others– Example is NCAA because it stands for events and services

related to the National Collegiate Athletic Association

Ownership of Trademarks

• Must be first to use the mark in trade• Must make continuous, uninterrupted use• May federally register the mark but this is

not required (common law use allowed)

Trademark Infringement

• Definition: When someone who is not a trademark owner engages in some unauthorized use of a trademark that is likely to cause consumers to be confused or deceived about who really owns the trademark mistake

• Elements of claim1. Trademark owner must show that she has used and preferably

registered the mark

2. Must demonstrate that the other party’s use of the mark is likely to cause confusion or to deceive consumers about who is the true source of the trademark.

Factors That Determine Infringement

• Strength of the mark

• Similarity between the marks

• Evidence of actual confusion

• Consumer sophistication

• Quality of the alleged infringer’s products

• Similarity between the products and the ways they are sold

• Likelihood that the owner will expand the use of his own marks on other products in the future

• Whether the alleged infringer acted with good faith

Defenses to Claim of Trademark Infringement

• Fair use: Where a trademark is used fairly and in good faith only to describe the goods or services involved (e.g., logo used in newscast)

• Noncommercial use: Artistic transformative use (e.g., Andy Warhol’s Campbell’s Soup paintings)

• Agreement or license by the trademark holder consenting to use by another

Licensing

• License: A right granted by an owner, known as the licensor, to a third party, the licensee, which permits the licensee to associate his or her goods, services, or business with the logos, names, and mascots of the licensor. Granting a license creates a contractual relationship between the licensor and the licensee

• In sports:– Professional leagues and unions have licensing programs.– Some players license their own names and likenesses.– The NCAA registers its own marks.– Schools license their marks.

Olympic Marks

• Special level of protection under federal law• Covers the interlocking rings, the word Olympic

• No proof of likelihood of confusion; improper use is enough

Nicknames

• Trademark protection can be denied if a mark is shown to be immoral, deceptive, scandalous, or disparaging – Are Native American caricatures disparaging?– Fighting Sioux– Washington Redskins

Internet Domain Names

• Cybersquatting: Registering a domain name similar to someone’s registered trademark and demanding payment for the trademark holder to buy back that name

• Uniform Dispute Resolution Process– UDRP is administered by the Internet Corporation

for Assigned Names and Numbers (ICANN). – Trademark owner must allege that its mark is

identical or confusingly similar to the mark used by the cybersquatter and that the cybersquatter registered and used the domain name in bad faith.

Copyright Law

Unlike trademark law, copyright law does not protect intangible ideas; rather, it protects ideas or other items that can be identified on tape, on paper, or on screen.

Copyright

• A right granted by statute to the author or creator of a literary or artistic work that provides the author with the exclusive right to reproduce, publish, or sell the production.

• Not limited to authors or creators. A nonauthor can obtain these rights by agreement.

Works That Are Copyrighted

• Books and other literary works• Music and musical works, including any accompanying words• Dramatic works such as plays, including any accompanying

music• Pantomimes and choreographic works• Pictorial (photographic), graphic, and sculptural works• Motion pictures and other audiovisual works• Sound recordings• Architectural works

Exclusive Rights of Copyright Owner

• Reproduce the copyrighted work• Prepare derivative works based on the copyrighted work• Distribute copies to the public by sale or other transfer of

ownership or by rental, lease, or lending• Perform the copyrighted work publicly• Display the copyrighted work publicly• Perform the copyrighted work publicly by means of a digital

audio transmission

Copyright Infringement

• Unauthorized use of copyrighted material in a way that violates one of the owners’ exclusive rights in the copyright

• Punishment includes fines and injunctions

Right of Publicity

• Right of any person to control the commercial use of his or her identity

• Not produced under federal law• Many states have recognized the right by common

law or included it in their state statutes• Protects athletes’ and celebrities’ marketable

identities from commercial misappropriation by recognizing their right to control and profit from the use of their names and nicknames, likenesses, portraits, performances (under certain circumstances), biographical facts, symbolic representations, and so on

Statistical Information

• A major issue is whether the use of names and statistics for fantasy sports constitutes a misappropriation– CBC v. MLBAM case: Appeals court ruled such

information is protected, but First Amendment takes precedence

Patent Law

• A document provided by the federal government that gives the owner of an invention the right to exclude others from reproducing the patented invention for 20 years

• Specifically describes the invention in great detail • Invention is patentable if it is a new and useful

process, machine, manufacture, or composition of matter, or any new and useful improvement thereof

Patents in Sports

• Equipment used to play the sport (balls, bats, gloves, clubs)

• Designs for the apparel worn (shoes, shirts, jackets, cleats)

• Certain games themselves (the Arena Football League owns a patent for that style of football)

Patent Infringement

Action whereby someone other than the patent holder (without permission) makes, uses, sells, offers to sell, or imports patented material

Ambush Marketing

• Situation where one company creates advertising or promotional campaigns that confuse consumers and wrongly imply that the company is an official sponsor of an event – Harms companies that are official sponsors by weakening their

relationship with the event– Found with large-scale events such as the Super Bowl or

Olympics