Trademarks in Sports, Part 2
In a continuation of my last blog entry, which you can read here, the world of licensing and trademarks in sports has gained even further attention. Most recently the NCAA (National Collegiate Athletic Association) is dealing with lawsuits or the threat of lawsuits in the immediate future, due to potential licensing and trademark infringement. The NCAA bylaws prohibit forms of pay received by collegiate athletes due to their amateur status. Prohibited forms of pay include, but are not limited to, preferential treatment, benefits, or services. While college athletics continue to be an economic boost for most major universities, that athletes themselves are not able to profit from their brand. As schools benefit from tickets, jerseys and other apparel sales (the University of Texas sold over $9 million worth of apparel in 2012), and even likeness rights sold to video game services, many athletes seeing the potential economic benefit have taken steps to protect their brand as college athletics continue to be more profitable, specifically in football (the 2010-2011 sports season, the University of Oklahoma had net revenue of $104,338,844).
Johnny Manziel, the 2012 College Football Heisman award winner, filed a lawsuit in United States District Court on February 15, 2013, against Eric Vaughn, who at the time ran a website “Keep Calm and Johnny Football.” Vaughn "is accused of trademark infringement under the Lanham Act, Texas unfair competition, including the right of publicity, palming off and misappropriation" by selling shirts that use the nickname “Johnny Football” trademarked by Manziel in 2012. Typically, a trademark case would not gather much notice, but because Manziel is a high profile collegiate athlete and thus barred from profiting off of his image or likeness, it has created a possible legal loophole due to the fact that a student athlete “can keep financial earnings as a result of legal action.” Manziel is suing to stop the unlawful sale of his image, as well as for monetary relief in the form of attorney's fees and exemplary damages. The suit potentially could allow groups to intentionally infringe a player's trademarked image in order to legally give a student athlete some payout.
Another potential issue with the NCAA is a lawsuit brought about by former UCLA basketball player Ed O’Bannon (which lawsuit currently has sixteen former athletes and six current athletes added as plaintiffs). The original issue in the O’Bannon lawsuit is that the structure of college sports, where athletes are unable to sell their images, violates the Sherman Act. The major issue out of this lawsuit involves the licensing rights by the NCAA and the CLC to video game manufacturer EA SPORTS, which has developed college football games since 1993. While these video games do not specifically name the players, the game aims to create a sense of reality. Athletes in the video game correspond with their real life counterparts up to their height, weight, jersey number, and even hometown. EA SPORTS is not involved in the lawsuit but the NCAA has announced that it has cut ties with the video game manufacturer due to the potential impact of this lawsuit, making NCAA 14 (which sold 500,000 copies in one week) potentially the last college game under that brand. The NCAA is looking at possible major restructuring based on these cases of intellectual property making trademark and license rights all the more relevant to the individual.
Michael McCann, a professor of sports law at the Vermont Law explained the antitrust elements of the lawsuit, describing the suit’s two main claims in an article in Sports Illustrated:
First, by requiring student-athletes to forgo their identity rights in perpetuity, the NCAA has allegedly restrained trade in violation of the Sherman Act, a core source of federal antitrust law. Here’s why: student-athletes, but for their authorization of the NCAA to license their images and likenesses, would be able to negotiate their own licensing deals after leaving college. If they could do so, more licenses would be sold, which would theoretically produce a more competitive market for those licenses. A more competitive market normally means more choices and better prices for consumers. For example, if former student-athletes could negotiate their own licensing deals, multiple video game publishers could publish games featuring ex-players. More games could enhance technological innovation and lower prices for video game consumers. Second, according to the plaintiffs, the NCAA has deprived them of their “right of publicity.” The right of publicity refers to the property interest of a person’s name or likeness, i.e. one’s image, voice or even signature. Last year, when explaining why the NCAA has refrained from suing CBS over its use of player information in its fantasy sports game on CBS Sportsline.com, NCAA officials acknowledged that players’ rights of publicity belong to the players, and not to the NCAA.
The NCAA organizes athletic events and programs of 1,281 institutions and these lawsuits have the potential to disrupt and, some even predict, dismantle the organization. Intellectual property rights will only gain more traction and the NCAA has acknowledged this fact with their dissociation from EA SPORTS. The next year or two may completely revolutionize the world of college athletics and the NCAA and should be closely examined by the intellectual property community.