CORRELATION BETWEEN SPORTS AND INTELLECTUAL PROPERTY

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INTRODUCTION

We are at the growing stage of sports property expansion and commercialisation but if we consider a slope of improvement from the last 3 year Indian sports has changed a lot in many ways with the contribution of commercial sports leagues and properties.

Let’s take an example of World’s richest league Indian Premiere League. A descent start of commercial league format before this Indian Cricket League was started by Essel Group but didn’t work out due to lack of resources and support from BCCI. Then in 2007 BCCI started Indian Premiere League and commercialised it with involvement of corporate houses as franchises and sponsors. Broadcasting rights, involvement of autonomous broadcasters, corporate sponsorship, branding, sportsperson were the basic recipe for one of the most successful sports league of our country which sets a new standard of entertainment every year, generates huge revenue and gives a treat to the cricket fanatic nation.

IPL is not only a league when all ingredients come together and makes a sport identity it is called a sports product or property and then comes an another aspect of property here intangible property.

Sport is amalgam of intangible property and when we consider it on the legal lines it comes under Intellectual Property Rights and Laws.

Property? Anything that is owned by a person or legal identity.

Types of Property in modern Scenario-Tangible and Intangible

Tangible Property

Property that has physical substance and can be touched; Anything other than real estate or money, including furniture, cars, jewellery and china. Intangible property (example; a check account) lacks this physical quality.

That which may be felt or touched; it must necessarily be corporeal, but it may be real or personal. A house and a horse are, each, tangible property. The term is used in contradistinction to property not tangible. By the latter expression, is; meant that kind of property which, though in possession as respects the right, and, consequently, not strictly choses in action, yet differ; from goods, because they are neither tangible nor visible, though the thing produced from the right be perfectly so. In this class may be mentioned copyrights and patent-rights.[1]

Intangible Property

Unable to be touched and exists without physical presence.

An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company’s patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.[2]

To protect intangible property Intellectual Property rights and laws have come into consideration.

The earliest use of the term “intellectual property” appears to be in October 1845 Massachusetts Circuit Court ruling in the patent case Davoll et al v. Brown in which Justice Charles I. Woodbury wrote that “only in this way we can protect intellectual property, the labours of the mind, productions and interests as much a man’s own….as the wheat he cultivates, or the/flocks he rears”.[3]

Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce.                                                                                                                               

                                                                                                                              -WIPO (World Intellectual Property Organisation)

Sports and intellectual property are correlated. People need to understand the intellectual properties of sports. BY taking an example of IPL we can take the whole idea of how intellectual property works on it.

Sports events are intangible property but it’s a property protected under a set of laws.

Sport is a wide area which is covered under different aspects of intellectual properties. From Designs, copyrights, patents, Broadcasting rights to trademark.

Current Sports economy scenario is based on innovation and technology where once someone invent something new it will be protected and create a monopoly of the product for some period of time.

 

1. Copyright and Related Rights

Copyright is the right on art work, literature and expressions.

In Sports; Broadcasting rights, stadium architecture, content on apps and sports website (specifically the way of expressing information), animation clips during the match.

Nowdays with a scope of movies being made on the biography of sportspersons consent to use their life story into a movie is a subject to copyright and personalities charge some amount as well for this right of using their life story.

Flying Sikh Milkha Singh charged just one rupee to Rakyesh Omprakash Mehra to allow them to make a movie on his life.

In sports, copyrights and related rights plays a major role in the era of televised sports broadcasting rights are a most valuable rights one owns.

With projected television audiences of 32.5 billion people in 215 countries, the World Cup was a bonanza for broadcasting organizations. The International Federation of Football Association (FIFA) sold broadcasting rights worth one billion euro (US$1.3 bn) to over 500 broadcasting organizations, including television, radio, mobile telephony and Internet licensees. In Brazil alone, five TV companies signed licensing agreements. 60.5 million viewers in the region watched Brazil’s opening match; while almost a quarter of all South Korea’s TV viewers got up at 4am to watch their team play France.[4]

National Basketball Association v. Motorola, 105 F.3d 841 (2d Cir. 1997

Motorola, Inc. and Sports Team Analysis and Tracking Systems (“STATS”) appeal from a permanent injunction entered by Judge Preska. The injunction concerns a handheld pager sold by Motorola and marketed under the name “SportsTrax,” which displays updated information of professional basketball games in progress. The injunction prohibits appellants, absent authorization from the National Basketball Association and NBA Properties, Inc. (collectively the “NBA”), from transmitting scores or other data about NBA games in progress via the pagers, STATS’s site on America On-Line’s computer dial-up service, or “any equivalent means.”

The crux of the dispute concerns the extent to which a state law “hot-news” misappropriation claim based on International News Service v. Associated Press, 248 U.S.215 (1918) (“INS”), survives preemption by the federal Copyright Act and whether the NBA’s claim fits within the surviving INS-type claims. We hold that a narrow “hot-news” exception does survive preemption. However, we also hold that appellants’ transmission of “real-time” NBA game scores and information tabulated from television and radio broadcasts of games in progress does not constitute a misappropriation of “hot news” that is the property of the NBA.

The NBA cross-appeals from the dismissal of its Lanham Act claim. We hold that any misstatements by Motorola in advertising its pager were not material and affirm.

https://www.law.cornell.edu/copyright/cases/105_F3d_841.htm

Masck v. Sports Illustrated, et al., 2:13-cv-10226-GAD-DRG (E.D. Mich. complaint filed Jan. 18, 2013)

On his journey to winning the Heisman Trophy for the 1991 season, University of Michigan’s Desmond Howard returned a punt 93 yards for a touchdown and famously celebrated by recreating the stance of the trophy itself. See the photo in question, and the plaintiff’s attempts to merchandise it, at his “store.” (Check out the number of times the site stuffs the phrase “Desmond Howard”–I could see why this might raise some issues of its own).

In a wordy 67-page complaint that goes into overtime, the man behind the lens for the famous “Heisman Pose” photograph is now taking a group of defendants to court for allegedly copying and reproducing the work in various ways.

Brian Masck’s Claims Against the Plethora of Defendants. Brian Masck is suing Sports Illustrated, Nissan, Getty Images, Champions Press, Photo File, Inc., Fathead, Wal-Mart, Amazon.com, and Desmond Howard himself.

According to Masck, the defendants violated his copyright in the following ways:

(1) Sports Illustrated and Nissan teamed to run Nissan advertisements using the photograph in three separate magazine issues;

(2) Desmond Howard published the photo on his website;

(3) Getty Images published the photo on its website and sold unauthorized licenses;

(4) Champions Press published the photo without permission in Desmond Howard’s biography, I Wore 21;

(5) Photo File and Fathead sold unauthorized copies; and

(6) Amazon and Wal-Mart allowed merchants to sell copies of the work online.

Against everyone except Amazon and Wal-mart, Masck also included unfair competition claims under Lanham Act §1125 and Michigan state law.[5]

Hoopla Sports and Entertainment, Inc. v. Nike, Inc.

Hoopla Sports and Entertainment, Inc. came up with the idea for an international basketball contest performed by United States high-school students versus a collection of talented players overseas. The event was called the 1994 Father Liberty Game. The event was to carry the theme of peace and was developed around the awareness of the Bosnian War, to that end the name of the American team was Team Liberty USA and the international team was Nations United for Peace. In creating this event John Walsh, representing Hoopla Sports and Entertainment, Inc., solicited various sponsors including Nike, Inc. (the defendant). Nike did in fact sponsor the event and it was carried out. Hoopla had the intent to make this an annual event and alleges Nike’s commitment to be a part of it for the following year. The following year, Nike sponsored its own American High-School? versus the world event. Hoopla alleges that they made false statements with regards to the originality of the event. Further, that they used a similar theme, even the fact that it was rotated around Bosnia.

Hoopla brought suit against Nike for trademark infringement, breach of contract, intentional interference with prospective economic advantage and fraud. Nike motioned to dismiss based on the sufficiency of the complaint.[6]

2. Trademarks

 A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company.  Its origin dates back to ancient times when craftsmen reproduced their signatures, or “marks”, on their artistic works or products of a functional or practical nature. Over the years, these marks have evolved into today’s system of trademark registration and protection. The system helps consumers to identify and purchase a product or service based on whether its specific characteristics and quality – as indicated by its unique trademark – meet their needs.

                                                                                                                                                                                                                         – WIPO.

Trademarks in sports has its unique importance from sportsperson’s pose to his slang it can be protected under trademarks and these sports celebs make profits and earn good amount of money to dilute their trademarks.

Usain Bolt is an example of one of those sportspersons who have taken trademark on their pose and using it for commercial purposes from sport bags, clothing, apparels, headgears, t-shirts, pants, shorts, jackets, coats, hats, caps, headwear, underwear, sleepwear, swimwear, socks, gloves;

Sporting and Entertainment activities, sports competition, sports camps, online portal for training and consultancy services he has covered under this trademark.[7]

 

Under Armour Files Lawsuit Against Nike For Trademark Infringement

About a year ago, in February of 2013, Under Armour brought Nike to court to sue them for trademark infringement, trademark dilution, and unfair competition under the Lanham Act. Under Armour is seeking equity from Nike for allegedly infringing on Under Armour’s famous “I WILL” campaign used in various markets such as product lines consisting of apparel, footwear, gear, and accessories, also used with services, events, and marketing campaigns throughout digital media. Under Armour (UA) argues that Nike was fully aware of UA’s “I WILL” campaign that was trademarked in November 2000, but started their similar campaign anyway. Nike’s use of the “I WILL” slogan dilutes the distinctiveness of UA’s famous mark and therefore causes confusion for consumers and creates unfair competition.

“UA’s earliest filing/registration date for “I WILL” (which, according to the complaint is “registered and incontestable”) was back in November of 2000 and it simply covered “articles of clothing for men, women and children, namely shirts, hats in Class 25″ (which is a trademark category that covers clothing, headgear and footwear).”(2) As recent as May 2012 UA now owns several registered trademarks that cover all of the above as well as mobile and online store services that feature their goods. “The I WILL mark has also appeared on gift cards, on and in retail stores and displays, and in advertising and other materials, such as billboards, stadium signage and displays, Internet banner ads, and the homepage of Under Armour’s website at ua.com.” (3) These numerous trademarks are an example of Under Armour’s extensive use of their trademark tagline “I WILL” and how prominent it is in their business efforts. Consumers and followers of such popular sporting goods companies such as these should be able to distinct the two by their popular taglines Under Armour’s “I WILL” and Nike’s “JUST DO IT.” Even though these two companies seem to have equivalent business method in my eyes (a not so familiar consumer), Nike takes a rather large precedence over Under Armour, being that in 2012 Nike earner $25 billion dollars over UA’s $1.8 billion. The difference in capital is one of the main reasons UA is fighting to keep the confusion and dilution of their trademark non-existent.[8]

This case is still open, and a decision has not yet been made. Under Armour is asking for a juried court, for the public to become aware of this issue, and wants Nike to ultimately get rid and dispose of any sort of campaign material, all products and services. Basically asking for the defendant to destroy any confusing material in relation to UA’s “I WILL” trademark. [9]The CEO of Under Armour, Kevin Plank said that the company is the “scrappy underdog to Nike,” and in my opinion I completely agree. Nine times out of ten I will probably buy a Nike product over Under Armour, but that’s my consumer opinion. I’d admit that I’m more into brands and I believe Nike has a stronger brand than Under Armour, and I also prefer their clothing design over UA’s.  As I read Under Armour’s complaint, written out to the District Court of Maryland, I tend to agree with Under Armour and hope that they are ruled in favor of trademark infringement simple because I agree with the fact that they are the underdog to Nike. The amount of capital that Nike earned in 2012 over Under Armour is one simple fact that Nike already has a strong enough campaign (JUST DO IT). They don’t need to step all over the toes of Under Armour to pass them in the sporting goods market because they’re already so far ahead. Unfortunately I don’t think Under Armour will win this case because most of their trademarks were filed in 2012 and haven’t been officially registered yet. [10]Trademark filing #85628236 falls under Class 35 (Advertising, Business, and Retail Services) but only focuses on retail services both online and offline, therefore raising question that their trademark does not cover advertising campaigns. Under Armour argues about Nike’s use of “I WILL” on their home page, Facebook, and YouTube accounts. These are a few issues I’ve noticed with Under Armour’s complaint, but in the end I don’t think one campaign is considered a big deal to Nike. I think they will settle in court with an agreement to destroy the campaign and will build a new one because Nike can afford to and Under Armour cannot.

3. Patent

A patent is an exclusive right granted for an invention – a product or process that provides a new way of doing something, or that offers a new technical solution to a problem. A patent provides patent owners with protection for their inventions. Protection is granted for a limited period, generally 20 years.

                                                                                                                                                                                                                             -WIPO

With over growing sports technology and innovation, patent plays a major role to protect the rights off owners and for providing exclusive monopoly in the market.

Sports wearable, sport gear, design layout of sports tech product, design of the product, new technology or invention are subject to get patent protection.

 

Fantasy Sports Contests Providers Facing More Patent Infringement Cases

The legal cases are mounting against DraftKings and FanDuel, with 25 federal cases filed since October 2015. Among them are a class action lawsuit claiming negligence, fraud and false advertising against the daily fantasy game sites, a class action lawsuit accusing the companies of racketeering, and a filing for a temporary injunction by the New York state attorney general claiming that daily fantasy sports gaming is a rebranding of sports betting, which is illegal.

The companies will soon be adding lawyer patent fees to their already mounting legal costs. The three patent infringement complaints filed by Virtual Gaming Technologies, LLC claims that DraftKings, FanDuel and Fox Sports infringed on the patent rights of the inventor of fantasy sports games.

According to the complaint, William W. Junkin, president of FantasySports.com and founder of the FantaSports company, holds two patents for real-time interactive gaming systems, which Junkin assigned to Virtual Gaming Technologies.

In the lawsuit, Virtual Gaming Technologies describes Junkin as “a pioneer in the interactive computer gaming industry.” The complaint states that DraftKings, FanDuel and Fox Sports, which is infringing on the patent by using it for fantasy sports offered on the Fox Sports Interactive Media website, are not attributing or compensating Junkin for his insights that allowed for the creation of today’s interactive gaming technologies.

The patent infringement lawsuit claims that DraftKings, FanDuel and Fox Sports, which is an investor in DraftKings, infringed on:

A patent granted in January 1999 entitled: Interactive system allowing real time participation. The patent abstract describes real-time interaction with online contest systems that “enable fantasy owners to optimize scores obtained by a team through team member trades.”

The patent granted in February 2001 entitled: Interactive television system and methodology for an invention that allows people to compete in a “contest or game created around an individual event or series of events while it is aired on television.”

 For infringement of these two patents, Virtual Gaming Technologies is seeking an award of damages equal to a reasonable royalty amount in accordance with patent law.

The lawsuit also seeks to establish jurisdiction for the case in the Eastern District of Texas since DraftKings has a partnership with the Dallas Cowboys and Fox Sports, and DraftKings, FanDuel and Fox Sports provide and advertise the fantasy sports gaming products named in the lawsuit in the jurisdiction of the federal court’s location.

However, DraftKings is based in Boston, Massachusetts, and FanDuel, Inc., is headquartered in New York City, New York.

Lawyer patent cases in the Eastern District of Texas historically go in favor of the plaintiff, especially with infringement lawsuits.

In addition to filing the federal patent infringement case in Texas on November 2, 2015 against DraftKings, FanDuel and Fox Sports, Virtual Gaming Technologies also filed additional patent infringement lawsuits against other companies that operate fantasy sports platforms, including DraftDay, Draftpot and ESPN Internet Ventures, which produces ESPN.com.

The lawsuits all claim that the companies have or continue to make or sell the patented interactive system for use within their daily fantasy sports operations without reasonable compensation given to Junkin.[11]

 

4. Industrial Design

 An industrial design refers to the ornamental or aesthetic aspects of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or two-dimensional features, such as patterns, lines or colour.

Industrial designs are applied to a wide variety of industrial products and handicrafts: from technical and medical instruments to watches, jewellery and other luxury items; from house wares and electrical appliances to vehicles and architectural structures; from textile designs to leisure goods.

To be protected under most national laws, an industrial design must be new or original and non-functional. This means that an industrial design is primarily of an aesthetic nature, and any technical features of the article to which it is applied are not protected by the design registration. However, those features could be protected by a patent.                                                                                                                                                         

                                                                                                                                                                                                                 -WIPO

When we consider industrial designs in context of sports it allocates Designs of sports shoe, apparel, equipment, gear design, app design layout.

5. Trade Secret

 Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. Trade secrets encompass manufacturing or industrial secrets and commercial secrets. The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. Depending on the legal system, the protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information.

The subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. While a final determination of what information constitutes a trade secret will depend on the circumstances of each individual case, clearly unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence.

                                                                                                                                                                                                                      -WIPO

Baden Sports, Inc. v. Wilson Sporting Goods Co.

Wilson Sporting Goods Co., one of the world’s leading manufacturers of sports equipment, has been sued by a competitor, Baden Sports Inc., for patent infringement, unfair trade practices, and misappropriation of trade secrets. At issue in this case is Baden’s inflation table, which is used to inflate and package inflatable balls. Baden claims that Wilson solicited confidential and proprietary information from a retired Baden employee regarding Baden’s inflation table and basketball products. According to Baden’s complaint, Wilson used the information to develop a “soft”-feel basketball that is manufactured with a cellular sponge layer. Baden claims that the product infringes its patent covering cushion-control technology.

On May 23, 2011, Wilson moved to dismiss the complaint for failure to state a claim. It argues that Baden failed to show a plausible trade secret since Baden’s method of ball inflation is common among manufacturers. Additionally, Wilson requests the court to bar Baden’s common law unfair competition claim, arguing that it is preempted by the Washington Uniform Trade Secrets Act. Wilson argues that the underlying facts of Baden’s unfair competition claim are the same as those giving rise to its trade secrets claim.

On July 26, 2011 the court granted Wilson’s second claim in the earlier motion to dismiss, combating the allegations that defendant contacted a former employee and offered him consulting fees, causing subsequent disclosure of information about the operation and design of Baden’s inflation table. Importantly, the court dismissed Baden’s claim of trade secret misappropriation in finding that Baden’s inflation table did not constitute a valid trade secret under Washington Uniform Trade Secret law. The court further contended that the allegedly novel inflation table was not described with enough accuracy or detail so as to highlight any trade secret components or features. Thus, in failing to plead any details about inflation table that make it a trade secret, Baden did not meet the pleading requirements for the claim of trade secret misappropriation, dismissing Baden’s third claim of unfair competition as well. Both claims were dismissed without prejudice, while the court gave leave for Wilson to eventually amend it’s complaint on September 7, 2011.

With Baden’s October 19th answer, the basketball inflation table litigation entered a discovery and deposition phase, with both parties trading opening briefs and filing declarations with the court. In late July, 2012 Baden Sports filed its motion for summary judgment on the pleadings and limited discovery, countered by Wilson’s own motion for summary judgment days later. Wilson replied in late August 2012 to Baden’s motion for summary judgment, and on September 6, 2012 a stipulation and order was entered for extension of ongoing mediation proceedings by the parties. This stipulation was granted and the mediation deadline was extended until October 4, 2012 to the parties to reach a potential mediated settlement.          

Citations :- 

[1] http://www.lectlaw.com/def2/t005.htm

 

[2] Intangible Asset Definition | Investopedia http://www.investopedia.com/terms/i/intangibleasset.asp#ixzz3w09dxssF

[3] Woodb & M 53, 3 West L.J. 151, 7 5. Cas.197, No. 3662, 2 Robb. Pat. Cas. 303, Merw. Pat. Inv. 414

[4] http://www.wipo.int/wipo_magazine/en/2006/04/article_0005.html

[5] http://blog.ericgoldman.org/archives/2013/02/heisman_pose_ph_1.htm

[6] http://www.casesofinterest.com/tiki/Hoopla+Sports+and+Entertainment+Inc+v+Nike+Inc

[7] http://cdn.newsapi.com.au/image/v1/8079724332f6e145261954ee41fce83f?api_key=zw4msefggf9wdvqswdfuqnr5

[8] Burke, Monte. “Under Armour Files Lawsuit Against Nike For Trademark Infringement.” Forbes. Forbes Magazine, 21 Feb. 2013. Web. 23 Apr. 2014. <http://www.forbes.com/sites/monteburke/2013/02/21/under-armour-files-lawsuit-against-nike-for-trademark-infringement/>.

[9] Kendrick, Adrienne. “Under Armour Sues Nike Over Use of “I Will” – IPWatchdog.com | Patents & Patent Law.” IPWatchdogcom Patents Patent Law Under Armour Sues Nike Over Use of I Will Comments. IPwatchdog, Inc., 27 Feb. 2013. Web. 23 Apr. 2014. <http://www.ipwatchdog.com/2013/02/27/under-armour-sues-nike-over-use-of-i-will/id=36115/>.

[10] Rettew, Douglas A. . “IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND BALTIMORE DIVISION.” Under Armour, Inc. vs. Nike, Inc. . Under Armour, Inc., 21 Feb. 2013. Web. 23 Apr. 2014. <http://blogs-images.forbes.com/monteburke/files/2013/02/Under-Armour-Nike-Complaint-pdf.pdf>.

[11] http://www.lspatents.com/blog/fantasy-sports-contests-providers-facing-more-patent-infringement-cases

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Ekta Khangawal

Ekta Khangawal

Founder SportsGranny, Studying Law at Law Centre -1, Faculty of Law (University of Delhi)
Ekta Khangawal

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