Intellectual property rights update: key cases for sport in 2017/18

Published 08 June 2018 | Authored by: Sean Corbett

At a time when the commercial importance of trademarks are more important than ever, a study1 published in the Harvard Law Review found that 81% of 1000 of the most common words are already registered as single-word marks, and suggests “we” are running out of good marks. What could this mean for sport, and more importantly the impact on brand protection activities? Well, given that often the most creative and recognisable trade marks incorporate design elements and word combinations there would seem to be no immediate need to panic. Any new sports brands, teams, franchises looking to make an impact can still rely on creativity and the trade mark clearance process to launch a new brand on the marketplace and field of play.

Against that interesting backdrop, this article reviews the most significant developments in Intellectual Property Rights (IPRs) in sport in the last year. While in Europe, non-conventional marks such as colour marks and shape marks were in the spotlight once again; in the US the long running dispute over disparaging marks raged on. Specifically, we examine:

  • Disparaging marks and their interaction with the US First Amendment – the Washington Redskins case

  • The latest on “non-conventional” trade marks

  • Graphical representation

  • A quick mention of Brexit

  • Unjustified threats – a review of the Intellectual Property (Unjustified Threats) Act 2017

  • The politics of a logo – the case of UKIP and the Premier League

  • Image rights – the case of Pro Evolution Soccor and Diego Maradona

  • What’s in a nick-name – the case of Thanasi Kokkinakis and Kellog

  • Trade mark clearance – the clearance process when launching or revamping a trade mark:

    • The Vegas Golden Knights – difficulties with the name supposedly chosen to avoid disputes

    • Formula 1 – Liberty Media’s revamp

    • Welcome to Miami – Beckham’s new newly approved MLS Miami franchise

    • Wembley Stadium naming woes

  • First to file & copyright cases – the Dulwich Hamlet FC case

  • Infringement –keeping the wolf from the door, the Wolves FC logo dispute

  • Commentary

Disparaging marks v. the First Amendment

In the US, 2017 finally saw an end, in the Courts at least, to a legal fight spanning some 25 years over the use of the term Redskins.2 There was a degree of inevitability about the decision following the Supreme Court’s decision3 in June 2017 confirming that the disparagement clause of The Lanham Act4 was unconstitutional and contrary to the First Amendment5. In a nutshell, they ruled that barring disparaging terms infringes on free speech.

The resulting victory for the Washington Redskins saw the US Court of Appeals for the Fourth Circuit vacate decisions6 cancelling the team’s federal registrations (which were the subject of the disparagement claims based on the Supreme Court’s decision in Matal v Tam7). Not every sucess is celebrated in the same light and, while the team scored a legal victory, there remains an air of discontent over the continued use of what some media outlets still describe as the Washington NFL team’s trade marks.

The latest on "non-conventional” marks

In the UK, KitKat were foiled once again in their attempts to register the shape8 of their four-fingered chocolate bar. The confectionary multinational, Nestle, was unsuccessful in their long-running dispute with rivals Cadburys over their attempts to exert their exclusive ownership of the shape of the KitKat bar in the UK. Despite their best efforts the three-dimensional shape was considered by the Court of Appeal to lack inherent distinctiveness” meaning it was unable to fulfil the primary function of a trade mark. Maybe it’s time to have a break... The ruling should come as no surprise given the general approach of the Courts to non-conventional marks in recent years.

At the end of 2016 the Court of Justice of the European Union (CJEU) concluded that the famous Rubik’s Cube could not be registered as a 3-Dimensional trade mark9 drawing a line under a ten-year battle over the registrability” of one of the most popular toys on the market. Essentially, the invalidation action filed by Simba Toys GmbH & Co against Seven Town’s registration was upheld on the basis that the trade mark consisted of a shape necessary to achieve a technical result”. In other words the rotating capability of the cube was a functional element that could not be protected as a trade mark. The KitKat decision while perhaps not puzzling following the Rubik’s decision and difficulties associated with proving the distinctiveness of a four-fingered chocolate bar also serves to highlight a tendency to scrutinise the rationale behind applications for shape marks suggesting a less favourable approach to shape marks generally than previously adopted.

Likewise, 2017 added some colour to the issue of the registrability of "colour marks" – albeit that colour was, to many, a murky shade of grey. Readers might recall that in 2016 The All England Lawn Tennis Club (Championships) Limited successfully registered in the UK colour marks claiming protection for vertical green and purple stripes and horizontal green and purple stripes.10 These registrations were the culmination of an iconic longstanding association of this colour combination and the Wimbedon tennis Championships stretching back over 100 years. The benefits to this particular rights holder in being able to exert a degree of ownership and protection of these colours in combination is obvious when one considers brand protection efforts and the scope for misusing these colours on merchandise sold to claim an association with the Wimbledon Championship that might not exist.

However, while a picture might convey a thousand words, is the same true of a colour or combination of colours when it comes to identifying brands? The CJEU famously ruled in the Libertel judgment11 that a colour mark can function as a trade mark.- i.e. fulfil the function of a badge of origin distinguishing the goods or services of one undertaking from those of other undertakings providing the registration requirements of Article 7 of the European Union Trade Mark Regulation12 (EUTMR) are also met. The absolute grounds for refusal outlined in this provision encompass the following grounds of refusal if;

  • the sign exclusively consists of the shape which results from the nature of the goods themselves (Art 7(1)(e)(i) EUTMR); and

  • the sign is not distinctive (Art 7(1)(b).

Against this background, the Advocate General (AG) issued an opinion in June 2017 commenting on the Louboutin case13 on the subject of abstract colour marks and whether they consist of the shape which results from the nature of the goods. In the case of Louboutin and the registrability of the shoe makers famous red sole, the AG has concluded that abstract colours do not consist of the shape of the goods. Since abstract colours are contourless they cannot fall foul of Article 7(1)(e)(i) EUTMR; however a second opinion from the same AG has perhaps fuelled further confusion14 on the future of Louboutins Red Sole trade mark, introducing the idea that what was at stake was not just a colour mark but rather a colour that has a certain spatial delimitation” (the sole of a shoe to which it is attached) and notion of colour applies as position marks”. Watch this space to see if this new hybrid” mark which can be defined by multiple characteristics (i.e. colour and position) is compatible with the trade mark system.

What does this all mean for IP rights holders? Whether brands originate from the world of sport, fashion, confectionary or the toy industry – non-conventional marks are still something of an enigma. They can enhance the IP armoury at a rights holders disposal, but they can also be a costly and time consuming pursuit to obatain. For any rights holder considering pursuing a non-conventional mark, it would make sense strategically to build up a reputation connected with long term use of it first, so that if hurdles cannot be overcome easily, acquired distinction could assist getting it over the line.

Graphical representation

With the removal of the requirement15 that trade marks must be graphically represented (following the introduction of the EUTMR on 1 October 2017), signs can effectively be represented in any appropriate form using generally available technology, provided the representation is clear, precise, self-contained, easily accessible, intelligible, durable and objective”.16

The creation of a "what you see is what you get" system is designed to make the EUTM Register easier to navigate but it also paved the way for a flurry of multimedia marks. One such application from Sniper Elite includes a 25 second clip of video game play (EU trade mark number 017282203) and perhaps this may prompt further filings from the world of eSports as rights holders look to enhance the protection they have in and around game play.

A quick mention of BREXIT

Published on 19 March 2018, the legal text of the Draft Withdrawal Agreement17 sets out the terms upon which UK and EU negotiators have reached a settlement, subject to minor technical legal revisions. In particular, the text provides some clarity on the extended protection of European Union trade mark registrations (EUTMs - including International Registrations designating the EU), Registered Community Designs (RCDs) and Unregistered Community Designs (UCDs) which will take effect from the end of the transitional period” (hereby referred to as the commencement date).

The important take away from the Draft Withdrawal Agreement is the reference to a transition or implementation period” during which EU law will continue to apply in the UK. This means that the above-mentioned rights will continue to be recognised and enforced in the UK. The Commission stipulates that the transition period will commence on the date of entry into force of the Agreement and is due to end on 31 December 2020. After this date, all EUTMs and RCDs will automatically have, without any re-examination” an equivalent registered and enforceable intellectual property right in the United Kingdom”.

Make of this what you will but Rights Holders with a commercial interest in the UK and the EU should use the update as a good opportunity to review IP portfolios and the protection they have and need.

The Intellectual Property (Unjustified Threats) Act 2017

Another important development in the UK as far as IP enforcement is concerned came in the form of the Intellectual Property (Unjustified Threats) Act 2017, which came into force on 1 October 2017. The new law is the result of a consultation process triggered by the Law Commission in April 2013. It is designed to readdress the balance between IP rights holders looking to enforce their rights, and those parties who may be subjected to unjustified threats.

IP practitioners will be aware that UK law provides for protection against groundless threats of infringement proceedings by the holder of a patent, trade mark, unregistered design right or registered design. These provisions do not apply to copyright or unregistered trade mark rights but essentially the new regime attempts to make clear what right holders can communicate to alleged infringers and where threats to secondary infringers (e.g. retailers) would be justified.

The key changes can be found here.18

The politics of a logo

As mentioned above adopting a new logo can come with many pitfalls but clearance searches governing the due diligence process and effectively giving the green light for the use of the new logo is perhaps one of the most important steps a rights holder needs to take pre-launch. When UKIP unveiled their new logo to take them forward in the post-Brexit era it immediately prompted comparisons with the Premier League’s logo which also depicted a lion’s head.19 It is worth noting that any similarity between the two logos might well be offset by a lack of similarity in terms of their respective use” but nevertheless the media coverage and perhaps some discrete efforts from the Premier League appear to have been enough to convince UKIP to go back to the drawing board and revert to their old logo without so much as a public roar.20

Image rights 

Image Rights are still somewhat under developed and under-utilized as a significant IP Right in Europe. In many jurisdictions the so-called personality right allowing celebrities to control the use of their likeness is a more potent weapon. Professional athletes would appear to be the most likely target for the misappropriation of their name or likeness and this was the case last year in connection with video game publisher Konami’s use of football legend Diego Maradona’s image and name in their popular football video game Pro Evolution Soccer.21 Upon becoming aware that his personal image and name was being used the former captain and manager of the Argentina national team confirmed that he would take legal action to prevent the unauthorised use of his personal IP Rights. Konami defended their use pointing to a license agreement with FC Barcelona which they claimed encompassed rights to the name and likeness of former players of the club. The two parties came to an agreement to settle the dispute but this tussle serves to highlight the disparity that often exists when it comes to a licensor/licensees understanding of rights owned, license periods and the use of image rights and personal trade marks versus the reality of ownership.

What’s in a nickname? Trade marks over breakfast

Australian tennis player, Thanasi Kokkinakis, found himself facing a court battle with breakfast cereal maker Kellogg’s following attempts to register his "Special K"22 nickname in Australia ahead of a marketing campaign set to serve up branded clothing and tennis wear. Kokkinakis would be following in the footsteps of iconic legends of the game such as Rafa Nadal and Roger Federer by adopting a moniker to commercialise, exploiting the potential their on-court efforts have afforded them.

The young Australian might not be in the same league as Nadal or Federer, but his early efforts to build a personal brand have been somewhat quashed by Kellogg’s who have opposed his trade mark application and in turn sought to register their own Special K” trademark in identical classes to that of Kokkinakis – outside of their usual goods of interest.23 It looks like advantage to the cereal maker at this stage even though most spectators would consider confusion as to source of origin unlikely. Perhaps the simplest resolution and grounds for a co-existence in this dispute comes in the form of a doubles partnership with Special K” becoming a brand ambassador for...well Special K”.

Trade mark clearance

Lift off! Or out with the old and in with the new.

Whether one is looking at launching a new brand for the first time or rebranding an existing logo, from evolution to revolution the trade mark clearance process (the process of ensuring that a chosen trade mark, name, brand or logo is free to use and does not infringe on an existing right) is if paramount importance in ensuring the success of the launch or rebrand.

Spending huge amounts unveiling or marketing a new product name or logo is counterproductive if it turns out that the new mark/logo was not free to use in the desired guise and infringed earlier rights. Of course, any rebrand, especially in the world of sport, runs the risk of incurring the wrath of ardent fans often stoically anti- change where this change alters something they have pinned their allegiance to. Fans can however over time get behind a new logo and suitable marketing and sporting success often helps alter the mindset of any ill feeling.

Infringing earlier rights or even running into significant obstacles along the registration programme is a harder challenge to navigate. 2017-2018 introduced both new logos and brave new revamps for established brands/logos proving the path from concept to launch and beyond never did run smooth as far as IP Rights are concerned.

Golden Knights parachuting into trade mark dispute

The Vegas Golden Knights have enjoyed a successful first Season in the National Hockey League. But after enjoying success on the ice, their progress off the ice has been perhaps less smooth with their attempts to register the Hockey team’s name and logo skidding to a halt. First came an official objection raised by the USPTO. Then came an opposition lodged by the US Army.24

The opposition alleges that the name and logo adopted by the hockey team are confusingly similar in sound, meaning and appearance25 to the name and logo adopted by the army’s parachute team known as the Golden Knights. Furthermore the opposition alleges that the use of the marks would damage the army by falsely creating an association between the two entities. Naturally, the Hockey team disagree that confusion is likely between a parachute team and a major-league Hockey team.

This is one dispute to keep an eye on offering opportunities for an interesting co-existence allowing for a demarcation of each parties respective interests since it is hard to see how the hockey team will back down now.

Pole position – Formula 1’s new logo

2017 also saw a new logo and a fresh look for Formula 1 as the premier motor racing series looked to freshen up its image adopting a new logo26 to introduce a new era following the end of Bernie Ecclestone’s grip on the commercial reigns of the Championship stretching back over 40 years.

While the logo might not find favour with everyone (Lewis Hamilton) no doubt it will grow on most fans with the right exposure. However in the meantime, it will be an interesting journey for the rights holder of this high-octane commercial platform to try and match the worldwide registration programme of the old F1 logo. It will be a tough task to achieve the same level of fame and notoriety that put the Formula 1 group in pole position when it came to enforcing its rights to prevent infringements and opposing similar marks at the Registry level.

With so many territories to cover and such a wide-ranging commercial arena to protect there will be some likely obstructions along the way as new filings are examined and published for opposition purposes.

Welcome to Miami – Beckham’s new newly approved MLS Miami franchise

Interestingly, looking ahead to new sporting ventures due to make a public entrance, David Beckham’s newly approved MLS Miami franchise is yet to reveal a club name and/or any purported brand identifiers27. A quick glance at the US Trade Mark Register reveals some prior rights suggesting the legal and marketing teams need to put their heads together. Perhaps The Miami Spice” is still an outside bet although reports suggest that team behind the Miami franchise want to open up the naming process to fans. What could possibly go wrong?

On the way to Wembley?

In sport, a classic David v Goliath battle often captures the imagination, especially if the centre–stage for that battle is Wembley. However, not all football battles take place on the field of play, and while it is not often that a trade mark dispute allows headline writers to take the day off, sometimes the headlines write themselves Football Minnows in Wembley logo battle28.

The minnows in this case were Wembley FC, who play in the Spartan South Midlands Football League, the ninth tier of English football and they play their home games just two miles away from Wembley Stadium. The aforementioned minnows lost rights to their European Trade Mark protecting their club emblem featuring the term Wembley” which was registered in 201229.

The Football Association (The FA) either missed or overlooked the chance to formally oppose this mark when it was published for opposition but subsequently via Wembley National Stadium (WNS) sought to cancel the mark. In July 2017, the EUIPO cancelled the contested mark confirming that the Wembley FC Logo (a figurative mark consisting of a red coat of arms, depicting the stylised head of a lion which occupies nearly the entire shield and which is predominantly in white”), makes use of Wembley” as its distinctive feature, with the letters FC” and the club’s Latin motto,A posse ad esse (from possibility to reality), in much smaller, less eye-catching text.

The prominence of the common contested element Wembley” was such that it was deemed to infringe the older rights of the famous stadium and this led to the EUIPO’s cancellation division conclusion that the contested trademark must, therefore, be declared invalid for all the contested goods and services”. The club has taken the match-up into extra time appealing the decision and the dispute will linger on for a little while longer with the backlash of public opinion suggesting the National Stadium has been a bit heavy handed in its handling of the dispute.30

The lesson to be learnt is perhaps a stark reminder of the value of a watch surveillance service which would screen for similar marks in advance of registration but also so too a reminder that all is not lost if a rights holder fails to meet an opposition deadline to oppose since cancellation provisions can save the day.

First to file and copyright cases – The Dulwich Hamlet FC case

Being first to file a successful trade mark application is often a key component in establishing rights that trump similar marks filed later on the Trademark Register subject to maintenance requirements and it is perhaps still the case that many of our most recognisable teams, professional athletes are woefully under protected in securing the IP armoury that they claim to have rights in and would ideally like to rely on, thus sometimes complicating the chain of rights once a dispute arises. First to file will not always save the day however, especially if earlier unregistered rights come into play and where the motives behind applications to establish rights are clearly questionable.

In one of the more unusual IP disputes to come to the public attention over the past year the 125-year-old non-league team, Dulwich Hamlet, found themselves evicted from their historic home ground. Meadow, the property investment fund, who own the ground, informed the club that their license to play at the ground had been revoked and then followed up by confirming via a solicitors letter that various trademarks identifying the club including "Dulwich Hamlet Football Club", "The Hamlet" and "DHFC" had been registered as trade marks some months before in October 2017 by a subsidiary of Meadows, with a demand that the club cease all use of these marks including on printed material and online.31

It is perhaps rare that planning disputes act as the catalyst for trade mark filings, but the club will now no doubt be looking to rely on its extensive and deep-rooted historic use of these unregistered rights to fight back. Other counter-attacking options for "The Hamlet" include seeking to invalidate the aforementioned registrations and questioning whether such a letter constituted unjustified threats under the new revisions the Intellectual Property (Unjustified Threats) Act 2017 (see above). Will such actions mean more clubs lower down the leagues explore the option of securing registered rights to the IP that announces to the world who they are?

Infringement – keeping the wolf from the door

Likewise establishing clear rights in the copyright of a logo early on and in particular documenting the chain of title and creation of the copyright work” can be equally vital in avoiding future disputes.

High flying Wolves might be prowling their way to a likely promotion back to the Premier League, but they are facing a potentially costly dispute over the origins of the club’s distinctive angular wolf’s head logo”. It was revealed that a 71-year-old man issued a claim in the High Court alleging he is the author of the work” dating back to 1963 first submitted back in 1963 as part of a local art competition. 32

Conclusion

Ultimately, the success of any IPRs within an IP portfolio rests in the hands of the parties controlling what is protected and how these rights are utilised. The overriding take away for rights holders is to look after the IPRs that protect your commercial offerings and these IPRs will look after the brand and ensure continued success in the commercial and legal arena.

More than anything perhaps 2017-2018 taught rights holders from the world of sport that there is a time to enforce rights and a time to perhaps take a step back and consider if objectives can be achieved with less attrition by adopting a more collaborative approach to resolving disputes.

Likewise, launching a new brand or securing new rights will be best complimented by adopting some strategic measure to clear rights for use and unveil what would otherwise be nasty surprises waiting around the corner. After all, success is where preparation and opportunity meet.

This is an extract from the Commercial and IP law chapter of the LawInSport and BASL Sports Law Yearbook 2017/18. To obtain a full copy of the Yearbook, which contains 10 chapters and over 50 articles like this from the industry’s leading sports lawyers, please visit our website: https://sportslawyearbook.uk/

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About the Author

Sean Corbett

Sean Corbett

Sean is an IP practitioner and trade mark attorney with a unique insight into, and focus on, brand protection issues. After 14 action-fueled years at Formula One Management Ltd where he was Brand Protection Manager Sean has set up on his own as a Brand Protection Consultant offering a unique one-stop resource for every conceivable brand protection challenge to help protect, develop and strengthen the IP rights that are crucial to commercial success.

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