INTELLECTUAL PROPERTY RIGHTS IN SPORTS

The Sports industry has always been a massive sector across the world bringing together entertainment, games, culture and monetary business, right from the barbaric era through the glorious days of Caesar to the twenty first century money making sports industry. Sporting games have always been encouraged by rulers, governments, private individuals and entities interested not only in the games themselves but more in the monetary business quotient that sports entail.

 

The SPORTING EVENTS are no more SPORTING EVENTS, what they used to be. Worldwide, MONEY has acquired an enormous role in all sporting events. CORPORATIZATION of sports has become monumental. Marketing through franchising, as well as brand building of the sports, sportsmen and the event has gained gigantic importance, surpassing all other major aspects of a game.

 

With the business angle of sports growing by the day, dormant intellectual property rights (IPRs) vesting in almost every component of the sports industry are being tapped into and capitalized. IPRs are valuable assets that are used as marketing tools towards the branding of sporting games and connected events, sports clubs, teams, celebrity status etc. Marketing techniques are applied in creation, maintenance, popularization and sustenance of distinctive marks, logos and personalities, while copyrights vesting in brand and image creation etc. are protected to reap benefits on an exclusive basis considering the very nature of competition in sports.

 

Various football clubs around the world are a perfect example of intellectual property brand capitalization. Manchester United, Real Madrid, Barcelona and Liverpool are a few examples of football clubs that have been developed and marketed as huge brands worth millions of dollars.

 

In India also, the industry of sports is becoming bigger and bigger over the years with certain sports getting unimaginable mileage over others due to the commercialization and investment interest. Cricket has for decades been a gentleman’s sport, which has now transitioned into a monumental commercial game attracting huge capital, investments and profits. The latest T20-20 format and IPL (Indian Premier League) have taken off the veil to boldly announce that it is the commerce, which is now on the forefront of the game. The money in the games has led to huge scams in the recent past due to large monetary stakes, fixing, betting, doping and gambling issues. The Indian government is also trying to streamline the industry keeping every party interest in mind including the players, teams, sponsors and the public at large, through the introduction of the Sports Bill, 2011, which is soon likely to become a reality, and hopefully will be able to control the management of sports to some extent.

 

The recent success of the FORMULA ONE RACE organized in India shows the vast commercial interest generated in the corporate world with respect to branding and event management. The organization and smooth execution of a race of such international standard in India for the very first time has brought the nation into a select league,  putting further focus on the sports law and the intellectual property rights which can be used to create branding leading to immense value generation.

 

From the legal perspective, the intellectual property rights in the form of trademarks, copyrights, industrial designs, personality and image rights, advertising and publicity rights, licensing and franchising opportunities have acquired immense value for protection, commercialization and exploitation of commercial aspects of sports, sportsmen and sporting events. In India, IPL teams are an example of value creation through branding and intellectual property exploitation.

 

Trademarks in sports

play an important role in the sports business. With the inception of branding of sports events through the presence of features like a logo, captions, taglines, slogans and team names etc. (collectively referred as trademarks), brand value is created in sporting teams, clubs, players, merchandise etc. Team names and symbols create a level of association with the public and fan following helping the popularity ratings of any given team, club, player etc. Even the names of the players have acquired the status of trademarks due to their celebrity status. This popularity and brand image eventually converts into monetary profit through advertisements, brand ambassadors, goodwill and reputation of the sponsors etc.

 

Personality Rights in sports

play an important role in the brand creation of individual sports players and teams. Celebrity status leads to various forms of image creation, brand endorsement and revenue generation capitalizing on fame.

 

It is desirable that the federations, organizers, team owners and sports gear manufacturers must opt for registration of their team names, logos, venues, captions, taglines and slogans registered as trademarks under the (Indian) Trademarks Act 1999, which will make their life easy for protecting their trademarks in Indian courts. An initiative on the part of the players to register their names, photographs and caricatures as trademarks/ brands should also be the norm of the day. Mere association of the name of a team, their logo or a team player, could offer unprecedented mileage to the person or entity using such name or logo. It is a loss to the team, team owner, the player and an unwarranted gain for the entity associating such name or logo for their own commercial benefits, without taking any permission, or paying any license fee or royalty. An unauthorized use of the trademarks by a third party without the consent or license of the respective owners of such trademarks, may also result in damage to the goodwill and reputation of the stakeholders, also amounting to unfair trade practice, unfair competition and dilution of goodwill and reputation.

 

Under the (Indian) Trade Marks Act, 1999 both civil and criminal remedies are simultaneously available against infringement and passing off. It is interesting to note that for seeking protection under the Indian laws REGISTRATION OF TRADEMARK IS NOT MANDATORY, so even those who have not obtained any registration can enforce their rights in the court of law. Interestingly violation of a trademark is a cognizable offence in India, and criminal proceedings can be initiated against the accused. Such enforcement mechanisms are expected to boost the protection of marks in India and reduce infringement and contravention of trademarks.

 

Copyright in sports

may vest in various components of sporting events including in the artwork connected to the logos and trademarks, promotions, slogans, images of a player or event etc., which may be protected in India under the provisions of the Copyright Act, 1957. The registration of copyright also not being mandatory and the same is comparatively easy to protect under the Indian laws. Despite the fact that the registration of copyright is not mandatory in India, and international copyrights are protectable in India as India is a signatory to Berne Convention of 1906 for the Protection of Literary and Artistic Works and the International Copyright Order, 1999, it is advisable to register the copyright in India as the copyright registration certificate is accepted as a “proof of ownership” in courts and by Police authorities, and acted upon smoothly by them.

 

The law of copyright in India not only provides for civil remedies in the form of permanent injunction, damages or accounts of profits, delivery of the infringing material for destruction and cost of the legal proceedings. etc. but also makes an instance of infringement of copyright, a cognizable offence punishable with a term which shall not be less than six months but which may extend to three years with a fine which shall not be less than INR 50,000 but may extend to INR 2,00,000. The (Indian) Copyright Act, 1957 gives power to the police authorities to register the Complaint (First Information Report, i.e., FIR) and act on its own to arrest the accused, search the premises of the accused and seize the infringing material without any intervention of the court.

 

Domain Names in sports,

which are also treated as trademarks by Indian courts, also play a substantial role in protection of intellectual property rights associated with sports. Enormous information is disseminated and events are being broadcasted including online games related to sporting events through internet, which has not only acquired an immense market share in branding and value creation, but also given opportunities to cyber squatters to take the benefit of the confusion which may be attributable solely to domain names. The websites have become a great source of advertising as well as brand building and following. In an effort to reach out to the public and build up brand recognition various sponsor companies conduct online competitions, online ticket sales for sporting events, online shopping portals for sale of merchandize etc., as the internet is a cost effective method to reach out to the public and create awareness about a sporting event, team players etc. However, an unimaginative approach towards the domain names may erodes the potential of the benefits which may accrue through a sporting event. Domain names assist in building connected brand image, portability and search engine optimization.  It has become important to register multiple domain names with various permutations and combinations to protect sport enthusiasts, fans, merchandize seekers, online gamers and information seekers from committing mistakes leading to diversion of traffic to unscrupulous websites hosted by cyber squatters. At times even the websites in the garb of fan sites may become source of cyber squatting, making it more important to be vigilant about registration of domain names. It is advisable that in order to promote as well as protect against brand abuse and trademark dilution, registering domain names with popular gTLDs  i.e. .com .net .org .biz .info, .asia, .name, .in, .co.in, etc., and  Registering low-cost ccTLDs such as .at .be .cc .eu .ch .co.uk .dk .it .nl .ru .tv .us .ws should be mandatorily resorted to. Other guiding principles for domain name registrations may include registering multiple variations of trademarks and slogans, including common & silly spelling mistakes.

 

Licensing and Franchising in sports

play an important role in revenue generation in the sporting industry, wherein the right to sell exclusive merchandize associated with exclusive clubs, teams, sponsor companies etc. for the purpose of brand generation and goodwill creation plays important role. Exclusivity is the key factor in sales generation and brand building. In light of counterfeit product markets it is important to ensure that all intellectual property rights involved are adequately protected under relevant agreements. Various contracts are involved at every stage of such marketing strategies and every aspect must be covered in detail to avoid future disputes considering huge investments and efforts at stake. An elaborate contract addressing all possible areas of concern and conflict, and resolution mechanism for the same must be always preferred over informal and personal arrangements.

Some other ways of creation of wealth through IPR vested in games may include Online Gaming, hospitality industry including Restaurant, bar and café services, event management services, Broadcasting Rights - T.V. and Media Rights and Personality Rights etc.

 

IGNORANCE IS A CURSE

Ignorance is bliss for all those who want to enjoy and reap the benefits of IPRs of others by claiming to be ignorant about even the existence of their IPR. Ignorance becomes a curse when the IPR owners fail to educate public, and give notice to the third parties who maybe planning to exploit the IPR of someone else without payment of any royalty or fee, or incurring any obligation. This makes the Brand and Content Protection Guidelines providing do’s and don’ts, a mandatory tool for all IPR owners associated with sports. Sponsor companies that pay huge amounts of money as capital and investment in the promotion of certain sports and the organization of sporting events, must have an elaborate brand and content protection guidelines, which should be propagated through their official websites and advertisements, for preventing misbranding, misrepresentation and misuse of IPRs in bad faith.

 

And the last but not the least, protection against

 

AMBUSH MARKETING

is one of the most important aspects of IPR in sports. One of the finest example of ambush marketing is the famous controversy between Coca Cola and Pepsi over the official status of the cola for the World Cup Cricket tournament of 1996-97, wherein Coca Cola brought out an ad claiming to be the OFFICIAL COLA of the tournament and Pepsi brought out a competing ad with the slogan “there is NOTHING OFFICIAL about it”. So, OFFICIAL-COLA and UN-OFFICCIAL-COLA may be a big problem.

 

To counter the endearing concept of ‘SPORTS MARKETING’, AMBUSH MARKETING has acquired a huge space in sporting events. Ambush marketing refers to companies promoting their brands or products by associating them with a team, league or event without paying for the privilege. In general Ambush means “An attack from Hidden Position”. In Ambush Marketing, Company capitalize to advertise themselves on the events, in which it’s not an official sponsor. There have been numerous examples in which other companies dragged the limelight, without being an official sponsor. Some common ambush tactics include the following:

·          Putting in place advertisements and flying branded blimps around venues , which are then seen by spectators and picked up by television coverage;

·          Handing out free branded merchandise to spectators at venues;

·          Running ads wishing teams “good luck” or “congratulations”; and

·          Using event tickets as prizes in consumer sweepstakes.

 

In any sporting event, beside the strategy to counter the threat of ambush campaigns is to secure trademark and copyright registrations for all marks, logos and images associated with an upcoming event in all active markets, Contractual obligations, and explicit terms and conditions for use of the IPRs related to such events are the other means of controlling ambush marketing.

 

The new version of commercial sports magnetizes core IPR issues like Trademark, Copyright, Design, licensing and franchising etc. All this delineates that IPR protection in events like the above are inevitable. Legal contractual agreements must be in place protecting all forms of intellectual property created in sporting events, teams, individual players etc. so as to protect all the stake holders and their financial interests. There are various forms of revenue generation through the sports industry and it is important for the government to promote its national sports and culture so as to raise it to international standards, paving India’s way forward into the exclusive league of developed countries across the world.

 

A classic example of disparagement and ambush marketing is the case between PEPSI and COCA COLA.

 

Pepsi Co., Inc. and Ors. vs Hindustan Coca Cola Ltd. and Anr.

 

[2003 (27) PTC 305 Del]

 

Yeh Dil Mange More

(My heart wants more)

Vs.

Yeh Dil Mange No More

(My heart wants no more)

The plaintiff in the instant case claimed disparagement of trademark and copyright in two advertisements of the defendants. Both advertisements allegedly desecrated the plaintiff’s products with derogatory remarks. One of the advertisements depicted a thinly veiled substitute of Pepsi as a “bachhon wali drink” (drink for kids) while mocking Pepsi’s advertising slogan by saying “Yeh Dil Mange No More”( My heart wants no more). Coca Cola famously telecast an advertisement claiming that ‘PAPPI’ was a ‘sweet’ drink meant for ‘children’, as opposed to ‘Thums Up’, that ‘grown up people’ would prefer. The Division Bench of the Delhi High Court issued a permanent injunction restraining its broadcast, holding that the advertisement depicted a Pepsi product in a ‘derogatory and mocking’ manner.