Attorneys Examine Trademark Issues in the Sports Industry
By Lawrence Stanley, Josh Dalton, and Peter Byrne, of Morgan Lewis
Particularly with sports teams, names matter.
A team’s name and logos come to invoke deep-running loyalties and a sense of community. As with any other business, a team’s name is its brand, and the goodwill attached to that brand is protected by trademark law. The year 2017 saw court decisions and trends in trademark law and practice that will have a significant impact on how teams select, maintain, and protect their identities—their names and logos.
The Supreme Court rules that prohibition on “disparaging” trademarks is unconstitutional.
Although Matal v. Tam arose in the context of the music industry, the case may well have been the most impactful development in sports trademark law over the past year. The case began when Simon Tam, a musician, sought to register his band’s name, The Slants. Tam selected the name as a way to “reclaim” stereotypes about Asian people and culture. After the United States Trademark Office (“USPTO”) rejected Mr. Tam’s application pursuant to the Lanham Act’s prohibition on disparaging trademarks, 15 U.S.C. § 1052(a), due to the fact that “a substantial composite of persons . . . find the term in the applied-for mark offensive,” Mr. Tam appealed to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit held that the disparagement clause violated the First Amendment. See In re Tam, 808 F.3d 1321, 1358 (Fed. Cir. 2015). The case was appealed to the United Supreme Court and, on June 19, 2017, the Court unanimously affirmed the Federal Circuit’s holding that the disparagement clause was unconstitutional. See Matal v. Tam, 137 S. Ct. 1744, 1765 (2017).
When the Tam decision came down, commentators immediately recognized the potential impact on professional sports. The clearest fallout related to the ongoing Washington Redskins trademark case. In 2014, the USPTO cancelled six Washington Redskins’ trademarks that include that term, citing the disparagement clause. At the time that Tam was decided, the Redskins’ appeal was pending before the Fourth Circuit. Following Tam, however, the Department of Justice and Native American litigants agreed to dismiss the case, as the Supreme Court’s decision rendered the disparagement clause issue moot.
The Redskins are not the only team impacted by the Tam decision. Several other sports teams own registrations for names and/or logos that large groups of people may find offensive. For example, Major League Baseball’s Cleveland Indians own several U.S. registrations for various iterations of their mascot, “Chief Wahoo.” Other notable trademarks that are now apparently safe under Tam include those owned by the Chicago Blackhawks of the National Hockey League, the Atlanta Braves of Major League Baseball, and the Florida State University Seminoles, among others.
(U.S. Reg. No. 1259795 owned by the Cleveland Indians)
Prohibition on registration of “immoral and scandalous” trademarks is struck down.
Five months after Tam, the Federal Circuit decided In re Erik Brunetti, No. 2015-1109 (Fed. Cir. December 15, 2017). In that case, the applicant, Erik Brunetti, applied to register the mark FUCT for use in connection with clothing. His application was initially rejected by the USPTO under the Lanham Act’s prohibition on immoral and scandalous trademarks and the Trademark Trial and Appeal Board (“TTAB”) affirmed. Mr. Brunetti appealed the TTAB’s decision to the Federal Circuit, and, citing Tam, the Federal Circuit held that the prohibition against immoral or scandalous marks violates the First Amendment.
Although teams in the four major American professional sports leagues are unlikely to rush to file for offensive, immoral or scandalous trademarks in the wake of Tam and Brunetti, the same might not be true of minor league teams or less-established sports leagues. Emboldened by those recent decisions, trademark applicants have already applied for marks that would never have stood a chance before those decisions. See, e.g. https://www.theverge.com/2017/7/25/16020666/us-trademark-law-disparaging-the-piss-tape-is-real (discussing application for THE PISS TAPE IS REAL, filed shortly after the Tam ruling). It stands to reason that upstart professional leagues or minor league teams looking to make a splash may try to garner publicity with edgy team names.
Continued tension exists between confidentiality and trademark protection.
Another notable development in 2017 has been the trend of media outlets looking to the USPTO’s trademark register as a source of “breaking news.” Recently, for example, it was widely reported that WWE Chairman and CEO Vince McMahon was exploring a reboot of the short-lived XFL professional football league after it was discovered that a related entity had filed five applications for the mark on December 16, 2017. Similarly, speculation that the city of Seattle will be awarded an NHL franchise was fueled when an attorney for prominent Seattle-based business, Microsoft, filed a trademark application for SEATTLE STEELHEADS on December 12, 2017, for use in connection with various hockey-related goods and services.
The XFL and SEATTLE STEELHEADS applications highlight a potential conflict between sports entities wishing to keep sensitive business plans confidential and the fear that squatters may swoop in and hijack valuable trademark rights. There are a multitude of reasons why an upstart professional sports league or a new hockey franchise may want to keep its plans secret until the last possible minute. In the former case, established leagues may be better able to fend off threats to viewership if given an early head start. As for the latter, relocation and/or expansion of sports teams is rife with uncertainty and it may behoove the new franchise to keep its plans close to the vest until they are finalized. Yet, at least in the XFL and SEATTLE STEELHEADS cases, it appears that worries of being beaten to the Trademark Office won out over secrecy.
Events surrounding the Raiders move from Oakland to Las Vegas demonstrated what can happen when teams relocate. On January 29, 2016, news broke of the possible relocation of the Raiders franchise. That same day, five individuals filed applications for the trademark LAS VEGAS RAIDERS. The USPTO refused each application based on the finding that the applied-for marks falsely suggested a connection with the Oakland Raiders club as well as posed a likelihood of confusion with the team’s prior registrations for trademarks that include the term “RAIDERS.”
While the Raiders ultimately prevailed over these trademark squatters due to their existing goodwill and prior registrations in the RAIDERS mark, expansion franchises or teams that change their names upon relocation (e.g. the Oklahoma City Thunder) enjoy no such rights. This may require particular diligence, as can be seen in the case of the new NHL franchise in Las Vegas. On June 26, 2016, NHL owners unanimously approved a bid for an expansion franchise based in Las Vegas. Approximately two months later, on August 23, 2016, an entity called Black Knight Sports and Entertainment LLC filed several trademark applications for various “KNIGHT” team names: VEGAS DESERT KNIGHTS (Serial Nos. 87147222 and 87147229), LAS VEGAS DESERT KNIGHTS (Serial Nos. 87147254 and 87147261), VEGAS SILVER KNIGHTS (Serial Nos. 87147242 and 87147247), LAS VEGAS SILVER KNIGHTS (Serial Nos. 87147273 and 87147274), VEGAS GOLDEN KNIGHTS (Serial Nos. 87147236 and 87147239), and LAS VEGAS GOLDEN KNIGHTS (Serial Nos. 87147265 and 87147269). Another two months later, on November 22, 2016, the team name was announced as the VEGAS GOLDEN KNIGHTS. Shortly thereafter, the team abandoned the SILVER KNIGHTS and DESERT KNIGHTS applications.
While expansion teams and relocating teams that are changing their team names may do well to follow the Vegas Golden Knights’ lead of applying to protect potential team names before rumored names leak, the strategy does raise a separate issue. The various “KNIGHTS” applications were all filed on the basis of the team’s intent to use the marks. When filing an intent-to-use application, the applicant must submit a sworn declaration that it has a bona fide intention to use the mark in commerce. Since professional sports teams ultimately choose a single name, there is some question as to whether the Las Vegas franchise truly possessed the requisite bona fide intent for any of its name variations. While the USPTO “will not evaluate the good faith of an applicant during the ex parte examination of applications…[c]onsideration of issues related to good faith may arise in an inter partes proceeding.” Trademark Manual of Examining Procedure §1101. The Vegas Golden Knights were able to secure their trademark rights by applying for multiple variations of the “KNIGHTS” name before it was finalized but that strategy may render the marks vulnerable to attack by other rights’ holders who assert that the team did not have a bona fide intent to use it at the time of application.
Whether in the context of defending legacy names or selecting new ones, these decisions and trends will continue to impact how sports teams develop and manage their goodwill. A new—if slightly less gentle—trademark playing field awaits. Game on.
