Licensing Sports Merchandise – Trademark and Copyright

Posted by Steve Vondran | Feb 02, 2018 | 0 Comments

Superbowl and Intellectual Property Rights – Logo licensing rights!

Introduction

This year, on February 4, the Philadelphia Eagles will play the New England Patriots in Super Bowl LII. Over 100 million viewers will tune in to watch the “Big Game.” Advertisers will pay over $5 million[1] for a 30-second commercial aired during the Super Bowl's run-time.

Because of its popularity, the Super Bowl is a potential revenue stream for those who know how to capitalize on it. The NFL is aware of its cash cow and has taken aggressive steps to protect its asset. Until recently, small businesses and even churches that wished to throw Super Bowl parties would be on the receiving end of cease-and-desist letters. The NFL sent such letters to organizations or individuals who used the phrase “Super Bowl” in promotional materials without paying a licensing fee or who planned on showing the game on a screen that the NFL deemed “too large.”[2] About 180 companies have NFL Properties' licenses to use official trademarks on clothing or other products.[3]

Legal Issue

There are many ways the NFL's intellectual property might be infringed. One common example is the vendors who sell counterfeit hats and t-shirts near stadiums. However, the NFL aggressively pursues even marginal infringement. The NFL made a splash several years ago when it sent a cease-and-desist letter to Fall Creek Baptist Church in Indianapolis, warning them not to show the Super Bowl on a giant video screen.[4] Stephen Colbert, on the Colbert Report, satirically used the phrase “Superb Owl” to avoid action from the NFL.[5] The NFL has since relaxed its policy on the usage of “Super Bowl” for private viewing parties and stopped pursuing action against parties that show the game on too large of a screen.[6]

A trademark is a “design, logo, graphic, word [or] symbol used to identify a product or service that guarantees the genuineness of [an] item.”[7] Trademarks are protected under Section 43(a) of the Lanham Act. Section 43(a), which prohibits the use in commerce of “any word, term, name, symbol, device, or any combination thereof… which is likely to cause confusion or mistake, or to deceive as to the affiliation, connection, or association… to the origin, sponsorship, or approval.”[8] Complicating matters further, a mark does not even need to be registered to receive protection. Instead, a court would consider whether the mark “distinguished the owner's goods from those of others.”[9]

The NFL employs professional watch companies to monitor trademark use and search for possible infringement.[10] In most instances, the NFL will send the purported infringer a cease-and-desist letter notifying them that they might be in violation of the NFL's copyrights. The average Joe, when faced with such a letter, immediately ceases using the NFL's intellectual property, so it is difficult to know whether the NFL's trademarks are as strong as purported because these cases rarely come before a court.

Analysis

Courts use the “likelihood of confusion” test to determine whether the trademark infringement has occurred.[11] The Ninth Circuit considers eight factors:

(1) the strength of the mark;

(2) the proximity of the goods;

(3) the similarity of the marks;

(4) evidence of actual confusion;

(5) the marketing channels used;

(6) the type of goods and the degree of care likely to be exercised by the purchaser;

(7) the defendant's intent in selecting the mark;

and

(8) the likelihood of expansion of the product lines.[12]

Individuals or businesses that are concerned about infringing the NFL's copyrights might look to past trademark registrations and trademark litigation for answers. Here are some case examples that may help illustrate this point.

2018 Super Bowl

Ahead of the Super Bowl, which is being held in Minneapolis this Sunday, NFL Properties LLC joined with the New England Patriots LLC and Philadelphia Eagles LLC to sue Does 1-100 in Hannepin County District Court.[13] The defendant, Does 1-100, is merely a stand-in for the up to 100 potential John Doe defendants that the plaintiff anticipates will be in violation of their rights. The complaint asks that the judge grant local police the power to seize counterfeit merchandise and tickets.[14] The NFL claims that the potential defendants will harm the public by scamming fans out of their money through sales of counterfeit merchandise and tickets. The complaint states that: “a few days before the Super Bowl game, itinerant defendants will descend on the host city to distribute their counterfeit merchandise and counterfeit tickets for ultimate cash resale and disappear without a trace.[15]” This kind of ex parte complaint has been utilized by the NFL in various jurisdictions to anticipate infringement of its rights leading up to the Super Bowl.[16]

The National Football League and NFL Properties

NFL Properties, LLC (“NFL Properties”) is the licensing and marketing arm of the NFL Member Clubs of the NFL, based out of New York, New York. NFL Properties is licensed by the Member Clubs to use the NFL marks to promote the interests of the NFL and the Clubs. Because of its role, it actively engages in trademark defense.

In NFL Properties, Inc. v. New Jersey Giants, NFL Properties sued New Jersey Giants, Inc. (“NJ Giants”) for copyright infringement. The defendant, the NJ Giants, sold items of sports-related apparel bearing the words “New Jersey Giants.” The three principle members of the corporation testified that one of the purposes for starting the business and incorporating the name was to sell the corporate name to the Giants' football team, and the other purpose was to sell the merchandise to fans of the Giants' football team who would associate and “no doubt” did associate the merchandise with the team. The Court ruled on behalf of NFL Properties and enjoined the NJ Giants from selling merchandise, required the defendants to change the name of their corporation, destroy merchandise related to the NJ Giants name, and determined that a hearing would be set to determine the damages, attorney's fees, and costs due to plaintiffs.

In American Needle, Inc. v. National Football League, the league was sued for antitrust by a corporation that designed, manufactured, and sold headwear that carried the trademarked names and logos of various professional athletic teams. The District Court granted summary judgment in favor of the league. The plaintiffs appealed and the United States Court of Appeals for the Seventh Circuit affirmed. Another appeal ensued, and the Supreme Court of the United States agreed to take the case. The Supreme Court held that licensing activities for individual teams' intellectual property that was conducted through a separate corporation (NFL Properties) might be a concerted action within the scope of § 1 of the Sherman Antitrust Act, which made it illegal to contract, combine, or conspire in restraint of trade. The Supreme Court sent the case back to the lower court to decide. After the Supreme Court's decision, the parties settled out of court so it is an open question of law whether the NFL's 32-Member Organizations' use of one company to hold intellectual property rights constituted a violation of antitrust statutes.

New England Patriots

Perfect Season

On February 3, 2008, the New England Patriots suffered a heartbreaking loss to the New York Giants in Super Bowl XLII. The New England Patriots lost by a field goal. As a result, the Patriots went 18-1 that season and failed to achieve the elusive perfect season. Uncertainty over the outcome of the Super Bowl did not prevent the owners of the Patriots, the Kraft Group, from registering the use of the marks “PERFECT SEASON” and “19-0.” While the Patriots did not end with the perfect season, the Kraft Group did end up licensing the “Perfect Season” mark to a high school football team.[17]

Gronk Nation, LLC v. Sully's Tees, LLC

The assignee of the trademark “Gronk,” the nickname of New England Patriots Tight-End Rob Gronkowski, “Get Gronk'd,” and “Gronk Nation” filed an infringement action against Sully's Tees, LLC, a t-shirt seller that was selling shirts bearing the term “Gronk.” Gronk Nation, LLC alleged unfair trade practices, trade name and trademark infringement, trade name and trademark dilution, and misappropriation and unauthorized use of name, portrait, or picture. The District Court ruled for Gronk Nation.

Washington Redskins

Blackhorse v. Pro-Football, Inc. was a trademark cancellation proceeding brought by five Native Americans who sought to cancel the Redskin's registrations of trademarks using the term “Redskins” for professional football-related services. The Administrative Trademark Judges presiding over the case agreed with the plaintiffs, and cancelled the disputed registrations because they were disparaging to Native Americans at the respective time they were registered.

However, since this dispute was arbitrated, the Supreme Court decided Matel v. Tam, holding that the US Patent and Trademark Office could not refuse to issue trademark registrations simply because the trademark was disparaging.

Seattle Seahawks

The Seattle Seahawks are known for being the home of the “12th Man,” however, they do not own the “12th Man” trademark. That honor belongs to Texas A&M. Since 2006, the Seahawks have paid Texas A&M a licensing fee to use the phrase.[18] This does not prevent the Seahawks from being one of the most litigious franchises in the NFL. The Seahawks actively pursue cases against local attempts to capitalize on the “12th Man” trademark.

In Football Northwest, LLC v. Barry, the Seattle Seahawks opposed the trademark registration of “12th Avenue Sports.” The defendant, Brenda Barry, filed the trademark for use in connection with “retail store services featuring sporting goods, apparel, footwear, headwear, and housewares…” and “providing news and information in the field of sports transmitted via internet and wireless communication networks; on-line journals, namely, blogs in the field of sports.” Ms. Barry eventually withdrew the application before a decision could be made.

In Football Northwest, LLC v. PBTM LLC, the Seattle Seahawks opposed PBTM, LLC's (“PBTM”) attempt to register “Turn the Volume Up to 12.” The Seahawks claimed that the registration violated their existing trademark on the “12s.” After the Seahawks opposed the registration, it was withdrawn.

Another Seahawks fan got clever and tried registering “TW ELVES,” one of the Seahawks trademarks but with a space in the middle of the word. The Seahawks noticed and have filed a pending opposition in Football Northwest, LLC v. Watson.

Green Bay Packers

Since the early 1960s, the Green Bay Packers have used the term “Titletown” to refer to themselves and their organization. They have several trademark registrations relating to that name. A company, Headquarters.com, Inc., registered the internet domain name www.titletown.com. Headquarters.com argued that it had planned to use the name descriptively for real estate services.[19] However, there was evidence that Headquarters.com had used the domain to host information about the Packers from time to time. The WIPO arbitrator did not buy that Headquarters.com did not register the domain in bad faith and the domain was ordered transferred.[20]

Bills Mafia

The Buffalo Bills are known as one of the longest suffering franchises in football and are home to one of the most passionate fan-bases. Their fans often refer to themselves as the “Bills Mafia.” One group of Bills fans, the Buffalo FAMbase, refers to itself as the “Creators of #BillsMafia.”[21] The Buffalo FAMbase attempted to register a trademark in a logo with the word Mafia superimposed on a buffalo.[22] The Bill's noted their opposition and the fan group eventually withdrew the application.[23]

Who Dat?

Who Dat?, Inc. (“WDI”) is a company that claimed to have trademarked the phrase “Who Dat?” – a popular catchphrase used by fans of the New Orleans Saints. In Who Dat? Inc. v. NFL Properties, WDI sued the NFL for copyright infringement. WDI claimed that they are owed royalties whenever the phrase is exploited for commercial purposes. They had more than 40 companies that already paid them royalties.[24] In a surprising decision, the NFL and the New Orleans Saints decided to settle with WDI after the district court allowed WDI's suit to proceed against the NFL.

Barstool Sports

The founder of Barstool Sports declared victory against the NFL in a triumphant Tweet, writing “we have conquered the NFL.” Barstool Sports owned the trademark to the slogan “Saturdays are for the boys.” The NFL attempted to sell merchandise from its online store which read “Sundays are for the [insert team name here].” Barstool Sports sent the league a cease and desist letter demanding the NFL stop selling and destroy all the inventory in question.[25] The NFL immediately folded and removed all the infringing “Sundays are for the…” shirts. The Barstool Sports Twitter account followed with the tweet: “Breaking: Barstool Sports broke the back of the NFL. Made them humble.”

Conclusion

Every year, fans of professional football watch the Super Bowl in droves. It is obvious to most fans that the NFL profits immensely from Super Bowl ads. But it can be easy to forget all of the other issues that surround the business of running a professional football league. The league is extremely complex and confronts legal issues every day, something to keep in mind on Sunday when you are enjoying the Big Game!

This blog was written by Ms. Claudia Lin, U.S.C. law student.

Contact a Intellectual property licensing lawyer

If you need help with merchandising or copyright and trademark licensing, contact us to speak with an IP licensing law firm. We can be reached at (877) 276-5084.