An analysis of IP rights in Japanese sports business – Part 2

Published 27 January 2014 By: Takuya Yamazaki

In the second part of this two-part series on IP rights in Japan, Takuya Yamasaki analyses the legal measures that can be taken to protect sports rights holders in Japan with a focus on infringement cases of ‘broadcasting rights’ and ‘sponsorship rights’.

In relation to sports event organisers combating these kinds of parasitic business practices there are two types of cases that outline the legal measures that can be taken to protect rights holders:

  1. 'broadcasting rights' infringement cases (the limits associated with the lack of IP rights protection afforded to 'sports matches'); and
  2. 'sponsorship rights' infringement cases (the limits associated with the protection of sports content as a 'brand')

 

'Broadcasting rights' infringement cases

Based on the ownership of a venue, sports match organisers/hosts and broadcaster that acquired the rights to broadcast a match cannot prohibit acts such as broadcasting by third parties or the transmission of information about the match.

In the afore-mentioned American 'SportsTrax' case, the claimant asserted that a basketball match in itself was a copyrightable work; however, this was rejected outright by both the first instance court and the appeals court. Also it was judged that the act of extracting and transmitting facts from the match broadcast was not an infringement of the copyright in terms of the audio and visual recordings of the match broadcast1.

Therefore what legal means can be used to prevent unauthorised parties from exploiting the content of a match? There are considered to be 3 main approaches to this problem:

  • Approach 1 - categorise such acts as the stealing or plagiarising of 'brand' value and to curb these by using the provisions of Japan's Trademark Act and the UCPA.
  • Approach 2 - engage parties who are likely to commit such acts and gain their 'consent' in advance to contractual obligations that they will not commit these. Thus, control can potentially be asserted when such contractual obligations are infringed.
  • Approach 3 - use tort law to control such acts (Japan's Civil Code - article 709 - Damages in Torts). This approach envisages that parties who infringe (intentionally or negligently) the rights of the sports event organiser and/or the broadcaster, which are contained in the broadcasting contract(s) agreed between the parties, could be pursued for liability under the said provision.

These three approaches are considered below.

Approach 1 – use of trademark laws as a means of control

The objective of Approach 1 is to utilise the provisions of Japan's Trademark Act and the UCPA to control 'unauthorised transmissions' of a sports match's content.

The Trademark Act and articles 2(1)(i) and (ii) of the UCPA (which cover acts of displaying indications of famous names and people), provide protection for marks/indications used in the course of business. The protection of team names and logos as 'brands' in the sports business will of course bring into effect the aforesaid trademark laws. These laws will not protect the 'content' or the 'intellectual creations' themselves; however, the business mark, when used consistently as a mark (e.g. when used in a form to indicate the source of the goods and services) should provide protection.

Accordingly, in this context let us consider the term 'Manchester United'. Basically, if this term is merely used in the text of a book, or as the book's title merely to indicate the book's content and not the source of the product, these uses cannot be controlled through the aforesaid trademark laws. There are of course limitations when using the laws concerned with protecting brands for the purpose of protecting sports contents.

There have been frequent efforts within the sports world, facilitated through a broad interpretation, to use 'brand protection laws' as if they functioned closely to 'contents protection laws'.

In relation to this point there is a significant Japan Supreme Court judgment (29 May 1984) on the so-called American Football Incident2. In this case a seller of self-assembly box lockers that were emblazoned in a hounds tooth check style with the team marks of seven American NFL teams, was sued by NFL Properties ('NFLP', the NFL's rights management company) and Sony Corporation (the master licensee for NFL products in Japan), which sought an injunction preventing these sales as an infringement of the former UCPA. The Supreme Court concluded that the act of the seller constituted an infringement of the former UCPA. This is because the seller's acts in using an indication of goods or business that were identical or similar to the merchandising group's (group: NFLP, Sony Corporation and its licensees) indication of goods and business, could create confusion amongst consumers that the seller belonged to this group.

In this case, the NFL team's marks were used as a pattern all over the lockers. This so-called 'design use' resulted in a legal tussle as to whether this use amounted to an indication of the product's source. In the judgment, the court recognised this in the affirmative, stating, "Even if the design had value, simply due to this, we cannot draw a quick conclusion that this was not an indication of the product's source."3

According to this judgment, using a famous team name or logo may also constitute an infringement of the UCPA, if the use could cause confusion to consumers as to existence of a relationship between the licensor and the licensee.

If this is broadly interpreted regarding all uses of sports contents, it may lead to the situation that any 'uses which could cause a feeling that there was a relationship with the sports event organiser' may trigger claims based on these uses infringing the UCPA. In fact, cases of such claims have frequently arisen in situations where sports contents have been used without 'giving a salute', such as financial compensation, to the event organiser or related parties.

However, even if this reasoning is applied to the case of an 'unauthorised transmission' of a sports match's content, it is highly questionable whether such an 'unauthorised transmission' would amount to 'conduct which makes it seem as if the organiser authorised the transmission' and thereby be an infringement of the UCPA. Also, it is very difficult to say whether such a transmission can be generally interpreted as a 'use that indicates goods or services' or as creating 'confusion in a broad sense'.

 

Approach 2 – use of contractual rights as a means of control

The objective of Approach 2 is to use contractual rights as a means of control.

For people in the sports business, there have frequently been efforts to create 'rights', and by extension 'internal sports business rights' and 'customs' (these are given specific legal effect through provisions such as article 1(2) of Japan's Commercial Code) by incorporating obligations, to prevent undesirable conduct for event organisers, into relevant contracts and business transactions. This is one classic way of conducting business in the industry.

However, the simple fact is that these 'rights' merely have the status of 'contractual rights'. Therefore, in principle these rights are only effective between the parties privy to such contractual relationships and are not enforceable against third parties.

On the other hand, for parties except for the 'sports industry players' there are other ways to prevent undesirable conduct at sports events (e.g. for spectators the terms and conditions for watching matches are included on the back of the tickets). For example, under the J-League Match Administration Regulations the following conduct is prohibited [Article 5(11)]: "The transmission of whole or part of the competition's sound and images (audio and visual data) through the internet or other media."

The legal effectiveness of such provisions is concerned with the issue of implied-in-fact contracts.

 

Approach 3 – using tort law (claims infringement doctrine) as a means of control

Approach 3 relates to using tort law as a means of control (Japan's Civil Code - article 709 - Damages in Torts) in situations where an unauthorised party, who despite knowing that broadcasting rights are traded for massive sums in the sports industry, transmits the contents of sports matches.

Judgments in relation to this have involved cases of so-called 'free-riding'. In other words, this concerns parties that take a 'free ride', such as through making dead copies of and selling 'information-based products' that others created at massive effort and expense. Even supposing that this type of intangible asset is not protected as a copyright, there have been various Japanese court judgments stipulating that such conduct is tortuously liable, because in infringing the legally protected interests of others this goes beyond socially acceptable norms.

From the perspective of these judgments, the act of copy-pasting and transmitting live play-by-play texts of football matches from a professional club's website in almost the same form as it appears therein (it seems that only factual data is not copyrightable), is likely to attract tortuous liability. Therefore the use of content in a form that is based substantially on the 'information-based products' of other parties will probably trigger this liability.

Nevertheless, although in such situations tort laws in Japan can be used as a means to claim relief after-the-event in the form of damages, they are limited as they do not provide injunctions to prevent the conduct itself.

Overall, it is very difficult through legal means for sports event organisers and broadcasters with the relevant broadcasting rights to control the infringement of 'broadcasting rights'. In reality, these parties are left with two approaches to pursue: Approach 2 or Approach 3 (of course, these two approaches are not always applicable).

 

Sponsorship rights' infringement cases

 

Ambush marketing

At mega sports events, like the FIFA World Cup, official sponsors pay large sums in sponsorship in order to use the FIFA World Cup in their advertising and marketing. However, there is no sui generis statutory protection regime for these expensive-to-acquire 'sponsorship rights'.

Even despite the existence of official sponsors with 'sponsorship rights', rival companies that do not possess such rights, without using the official event mark, have developed a broad range of advertising activities that are akin to the rights of these official sponsors. For example, when the FIFA World Cup is held there is much advertising that uses football images with slogans such as 'We support Japan'. This is known as ambush marketing.

With ambush marketing, if it is executed skilfully without using the official event mark, it is then very difficult to utilise trademark rights and rights under the UCPA to prevent such marketing. When considering pursuing legal responsibility under the widely interpreted UCPA concepts of 'using an indication of a product' and 'confusion', such interpretations cannot easily be utilised.

For instance, let us consider the situation where a non-official sponsor of the Japan Football Association in a commercial, although not using the official Japan team uniform, tries to evoke through using similar blue uniforms the image of players wearing the official uniform. It is a very sensitive and tricky problem as to whether this would amount to 'using an indication of a product's source' or if it is a use that could create 'confusion'. Generally, it is difficult to say that using a uniform that is only similar in colour to the official one would amount to an infringement of the UCPA. Also here it would be difficult to apply the above referred to Approach 2 (contractual rights as a means of control) or Approach 3 (using tort law as a means of control) because the issue is strongly associated with freedom of business operations.

Therefore, in recent years there has been an increase in the cases of special legislation being established outside Japan to combat ambush marketing at massive sports events like the Olympics. An example of this is 'The London Olympic Games and Paralympic Games Act 2006' that came into force in Britain six years prior to the 2012 London Olympics. However such legislation has not yet been enacted in Japan4.

 

Cases illustrating the limitations of legal protection for 'brands'

In Japan sports event organisers often register trademarks to protect their sports contents as 'brands'. Notwithstanding this however, (i) there are cases where the effectiveness of these trademark rights are limited. Furthermore, (ii) there have also been occasions where parties other than and prior to the sports event organisers have acquired the trademark rights for the brands associated with these sports events.

Let us consider the former case in terms of a sports event's name for which a trademark has been registered. There is a danger that through generalisation of the name, the mark perhaps loses its distinctive commercial appeal and therefore its effectiveness. In order to avoid this undesirable situation, in the case of FIFA it demands that various types of media in relation to describing the World Cup, must do so by affixing the '™' sign to FIFA's slogans as such: 'FIFA World Cup™'.

In fact, in April 2006, the year when Germany hosted the World Cup, the German Federal Court of Justice ruled that in relation to the 'FUSSBALL WM 2006' mark, to which FIFA had acquired the trademark rights, the name therein had lost its distinctive appeal due to its generalisation. Thus, based on this the said registered trademark rights were rescinded5.

Let us consider the latter case in terms of trademarks of sports event brands that have been acquired by parties other than the event organisers. In Japan there has been a trademark case concerning a famous baseball team name, where an individual not connected with the Hanshin Tigers baseball team registered the 'Hanshin Yusho' (English translation: Hanshin finishes first place) trademark. However, once it was recognised that the trademark was fully registered in 2004, in the following year Hanshin Tigers were successful in a legal claim to invalidate the said trademark. The legal authority for this was based on article 4(2)(xv) of the Trademark Act, that the mark would be likely to cause confusion in connection with the goods or services pertaining to a business of another person.

In another case the trademark owner of the name 'Juventus' who was not connected with the professional Italian football team, brought an injunction action against an official import seller licensed by the Italian club6. The court held that this type of action constituted an abuse by the trademark owner of his rights thereunder.

 

Conclusion – the future of IP rights in the sports business

In considering the relationship of Japan's sports business with IP rights, the business is somewhat cut-off. The fragile intangible property, which forms the object of business transactions in the sports industry, is not afforded the luxury of direct IP protection.

The sports business has already become a massive global industry yet, intriguingly, the 'rights' which underpin this business are legally fragile, which, in practice is a very serious problem.

The future course of the sports business is being fashioned through developments such as the movement towards establishing the above-described special laws to combat ambush marketing. In the future, what kind of rights protection measures will be devised? How will these developments be viewed from the perspective of protecting free competition and antitrust laws? Simply stated, it is a fascinating problem that we cannot keep our eyes off.

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Author

Takuya Yamazaki

Takuya Yamazaki

Takuya, a Japanese Attorney-at-Law, is the founder and Managing Partner of Field-R Law Offices, a niche sports and entertainment legal practice based in Tokyo.

Takuya has vast legal and business experience in sports both in Japan and internationally. He is a member of the FIFA Dispute Resolution Chamber, a position held since 2009. In 2016 he became the Chairman of FIFPro Division Asia/Oceania.

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