Tilting Playing Field: Expanded Protection For Sports Trademarks

Nov 20, 2009

By David Bennett
The licensing of logos and names of collegiate sports teams has grown into a multi-billion dollar industry that now brings in more than $3 billion dollars annually to collegiate programs. Owners of professional teams and universities have expended millions of dollars promoting their team names, logos, and colors to increase licensing revenues. As licensing revenues have grown, these trademark owners have become increasingly aggressive in their trademark enforcement activities and have pressed the courts, with some success, for broader trademark protection than afforded by traditional trademark doctrines. Recent lawsuits filed by trademark owners over unlicensed use of sports team trademarks reflect the current trend toward broadened trademark protection.
• In 2005, sports artist Daniel Moore was sued by the University of Alabama for his painting called “The Sack,” showing an Alabama defender sacking the Notre Dame quarterback in Alabama’s first win over Notre Dame. The University of Alabama objected because the Alabama defender depicted in the painting wore a uniform in the school’s colors.
• In September 2009, the Philadelphia Eagles sued a local radio station that offered tickets to a Philadelphia Eagles football game in a promotion of the radio station. The Philadelphia Eagles contends that the mention of the Philadelphia Eagles in the promotion implies sponsorship.
• In 2008, the Fifth Circuit Court of Appeals affirmed a decision against Smack Apparel finding trademark infringement for selling purple and gold clothing (the colors of Louisiana State University) containing expressions (not official logos or marks) that referred to the school.
To understand the current trend towards expansive trademark protection for sports team trademarks, it is necessary to start with the traditional role of the trademark laws in the United States. A trademark is a word, symbol, or design that is used by a producer to identify its goods and to distinguish them from the goods of other producers. That is, the trademark identifies the source of goods or services. To consumers, the trademark symbolizes the quality of the goods and the goodwill and reputation of the trademark owner. Consumers buy goods bearing a particular trademark when their experience with such goods is positive, and avoid goods bearing a particular trademark when their experience with such goods is negative. Thus, trademarks provide a convenient mechanism for consumers to find desirable products and to avoid undesirable products
The protection of trademarks serves two main functions: 1) the prevention of consumer confusion regarding the source of the goods; and 2) the protection of the good will symbolized by the trademark. The classic trademark infringement scenario involves a disreputable producer that marks his or her goods with a competitor’s trademark in order to pass off his or her goods as those of the competitor. Trademark law prevents deception of consumers and protects the competitor’s reputation if the falsely marked goods are of low quality.
Courts have never recognized an absolute right in trademarks. The touchstone of trademark infringement is likelihood of confusion in the minds of potential customers as to the source, affiliation, or sponsorship of the goods on which a mark is used. Trademark law prohibits the use of a mark if the use of the mark is likely to cause confusion among reasonably prudent purchasers as to the source of the goods on which the mark is used. On the other hand, traditional trademark law does not prevent non-confusing use of similar marks on unrelated goods, or the non-confusing uses of another’s mark for purposes other than to identify the source of the goods. One example of a non-confusing use is comparative advertising, where a competitor’s mark is used to compare an advertised product to the competitor’s product. Another example is the fair use of a descriptive mark to describe one’s goods.
The advent of commercial merchandising of sports team trademarks caused the courts to reexamine the basis of trademark protection. The confusion model of traditional trademark law is ill-suited to cases involving the ornamental use of sports team trademarks on goods because the primary function of the marks in this context is not to identify the source of the goods. Instead, the trademark in this context serves a primarily communicative function of allowing consumers to express support for their favorite team. Thus, the trademark becomes an intrinsic feature of the product. Consumers buy goods bearing a sports team trademark, not because they believe the goods are made or sponsored by the university, but because they want to express their support for their favorite team. That a trademark is used in an ornamental manner on goods, however, does not preclude it from also serving as an indicator of source. Whether there is a likelihood of confusion in this context depends on how consumers perceive the mark.
Two early cases demonstrate the schism that has developed in the courts on the issue of ornamental use of sports team trademarks. In Boston Professional Hockey Association Inc. v. Dallas Cap & Emblem Manufacturing, Inc., the defendant manufactured and sold embroidered emblems bearing the logos of professional hockey teams. The District Court found that there was no likelihood of confusion among consumers as to the source or origin of the goods. On appeal, the Fifth Circuit reversed, holding that the confusion requirement was met because the defendant used the team logos knowing that the purchasers would identify the logs as team trademark. By equating recognition with confusion, the Fifth Circuit in effect created a broad new property right in trademarks
In International Order of Job’s Daughters v. Lindeburg & Co., the Ninth Circuit reached a different conclusion. The plaintiff, a fraternal organization, sued the defendant for selling jewelry bearing the name and symbols of the fraternal organization without authorization. Reversing the district court’s finding of likelihood of confusion, the Ninth Circuit reasoned that consumers purchased jewelry to identify themselves with the fraternal organization; not because the consumers believed that the fraternal organization made or sponsored the goods. The court criticized Boston Hockey for creating a broad new property right and held that trademark law protects marks only to the extent necessary to prevent deception of consumers. Although Job’s Daughter did not deal specifically with sports team trademarks, the issue of ornamental use of marks is the same. In University of Pittsburgh v. Champion Products, Inc, the court followed the decision in Job’s Daughter and held that Champion did not infringe the university’s trademark rights by selling goods displaying university logos. The court in Champion Products stated that “it is not the province of the courts to create a property right in gross out of legislation intended solely to protect the consuming public and ethical businessmen from the depredations of manufacturers of counterfeit or deceptive products.”
Although the schism remains in the courts, the opposition to licensing of sports team trademarks in the marketplace has largely disappeared and it is now generally accepted by the public that goods bearing team names and official team logos must be licensed. It is not surprising then that the owners of universities and professional team owners now seek to further expand the protections that are given to their trademarks.
In Board of Supervisors of LSU v. Smack Apparel Co., the defendant sold goods in LSU’s team colors (purple and gold), but without any official university logos or insignias. The goods contained expressions that obliquely referred to the university and that were calculated to appeal to LSU fans. For example, one shirt bearing the phrase “Sweet as Sugar!” was sold by the defendant after LSU won the Sugar Bowl. The university claimed trademark rights in the team colors combined with any expressions that make reference to the university. The court acknowledged that colors are not inherently distinctive and that LSU had the burden of proving that its mark had acquired secondary meaning. But, in a decision reminiscent of the Boston Hockey decision, the court held that the secondary meaning requirement was met because consumers identified the colors with LSU and would thus perceive the colors as an indication of source because the consumers want to associate with the university. In its analysis of likelihood of confusion, the court placed great weight on an admission that the defendants used the school colors because the colors identified the university and held that the use of symbols associated with the university created an inescapable inference that consumers would be confused. Thus, the court in Smack Apparel relied on consumer recognition of the symbols with the university as a surrogate for secondary meaning, as well as for likelihood of confusion.
In 2005, the University of Alabama sued artist Daniel Moore for selling paintings depicting Alabama football players. The particular painting that triggered the action depicted an Alabama defender, in a crimson and white uniform, sacking the Notre Dame quarterback. Interestingly, the university name and logos did not appear in the painting. The University asserts that its trade dress, the crimson and white colors, is widely recognized as a symbol of the University and was used by the artist in the painting, thus creating a likelihood of confusion. This argument presupposes that consumers would perceive the duplication of the trade dress in a painting depicting a memorable moment in Alabama’s football history as an indication of source. In October, 2009, the court entered summary judgment against the University of Alabama, finding that its trademark rights were not infringed. .
In perhaps the most overreaching case involving sports team trademarks, the Philadelphia Eagles recently sued a local radio station for giving away tickets to a Philadelphia Eagles game in a promotion of the radio stations. The complaint alleges that WZXL “currently is running a radio promotion giving away Eagles Tickets every morning to its listeners and encouraging consumers… to join us at this weekend’s Eagles game.” Although the Eagles mark appears to be used only to describe the prize given away in the promotion, the complaint states that the “unauthorized use by Equity of the Eagles marks is likely to cause confusion, or to cause mistake, or to deceive as to the source or origin of Equity’s promotions involving Eagles tickets…”
The cases mentioned above demonstrate how far trademark law has drifted from its original purpose of preventing consumer confusion. Given the large amounts of money being made from officially licensed merchandise, it is not surprising that the trademark owners are pressing courts for ever broadening trademark protection in order to protect their monopolies over goods bearing official team names and logos. However, recognition of property-like interests in trademarks may not be good for consumers. The expanded protection under the property interest rationales effectively creates monopolies in sports merchandise, limits consumer choice, and raises the cost of the goods to consumers under the guise of protecting consumers against confusion. Moreover, overly broad protection of trademarks raises disturbing questions about extraction of symbols from the public domain and restrictions on consumers freedom of expression. In the realms of patents and copyrights, the grant of monopolies by the government has always been limited and has come with a quid pro quo that benefits consumers. What benefits do consumers get from the expanded protection of sports related trademarks granted by the courts? Careful analysis of the justifications for the expanded protection is needed to balance the trademark owner’s property interests in their trademarks against the public interest in free competition and freedom of expression.
David Bennett is an attorney with Coats & Bennett in Raleigh, N.C. His practice includes litigation involving patents, trademarks, copyrights, and trade secrets.


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