Chapter 14 Legal Aspects of Sport Marketing

Objectives To introduce the key legal concepts and issues that affect the marketing of the sport product To inform sport marketers about the need, and the methods used, to protect intellectual property associated with the creation of a sport product or event, or with ideas developed out of sport sponsorship and licensing programs To examine the legal limits of sport marketing and promotion so that sport marketers can better manage risks and avoid legal liability

Importance of Sport Law Relative to Sport Marketing Without working knowledge of how the law affects sport marketing, professionals in the field could risk considerable legal consequences. The law is complex, and sport marketers often require assistance from trained lawyers to navigate issues. But having a basic understanding of key issues is helpful.

What Is Intellectual Property? Primary goal of intellectual property law is to reward invention, ingenuity, and creativity in an effort to maintain an open and competitive marketplace. It is made up of three areas: 1. Trademarks 2. Copyrights 3. Patents

Licensing A trademark, copyright, or patent owner may grant permission for its use to others for a fee. When another does not have permission or licensed rights to use the copyright, trademark, or patent, that person is said to be infringing on the rights of the intellectual property owner.

Trademark Law A trademark is a word, name, symbol, or device used by a person, generally a manufacturer or merchant, to identify and distinguish its goods from those manufactured and sold by others, and to indicate the source of the goods.

Overview of Trademark Law Trademarks serve five purposes: Identify the source or origin Protect consumers from confusion or deception Designate a consistent level of quality Represent goodwill of the owner’s products or services Signify a substantial advertising investment

Trademark Protection Trademarks are protected on the national level by the Federal Trademark Act of 1946, commonly referred to as the Lanham Act Types of trademarks: Trade dress (product packaging) Service mark (service versus tangible product) Collective mark (players associations and leagues)

Trademark Registration To gain national trademark protection under the Lanham Act, a trademark must be registered with the United States Patent and Trademark Office (USPTO). Registered marks gain the following: The ability of the trademark owner to sue in federal court The ability to obtain trademark registration in foreign countries (continued)

Trademark Registration (continued) The opportunity to file the trademark with the U.S. Customs Service to prevent the importation of infringing foreign goods Acknowledgment and protection of the goodwill of the trademark holder The provision of public notice throughout the nation of trademark ownership, thus creating an easier burden of proof in trademark infringement lawsuits

Types of Trademarks Fanciful: distinctive Arbitrary: common term associated with entity Suggestive: connotes something about product Descriptive: commonly used word or phrase that is difficult, although not impossible, to protect Generic: commonly used word or phrase that is never entitled to trademark protection

Secondary Meaning Descriptive logos and marks can gain trademark protection if they are deemed by the courts to have acquired secondary meaning, defined as “a mental recognition in buyers’ and potential buyers’ minds that products connected with the symbol or device emanate from or are associated with the same source.”

Trademark Infringement Reproduction, counterfeiting, or imitating a registered mark in an attempt to sell or advertise goods or services that are likely to cause confusion or deceive without the consent of the trademark holder Traditional trademark infringement—confusion or mistake, or used to deceive False designation of origin Dilution

Determining Trademark Infringement The strength of the trademark The degree of similarity The similarity of the products involved The market channels involved The distribution channels involved (continued)

Determining Trademark Infringement (continued) The intent of the defendant in adopting the trademark The sophistication of potential consumers The evidence of actual confusion

Trademark Infringement Claims under which trademark owners might sue: False designation of origin Dilution Trademark infringement defenses: Abandonment Fair use defense Genericness Functionality

Additional Trademark Protection Issues Cybersquatting International trademark registration

Copyright Law and Sport Marketing Copyrights can protect written works, music, pictures or graphic designs, and audiovisual works (including broadcasts of sporting events). Copyright Act of 1976 protects original works of authorship appearing in any tangible medium of expression. Digital Millennium Copyright Act provides copyright laws regarding digital creations and the Internet. (continued)

Copyright Law and Sport Marketing (continued) A copyright can be for something to be developed later, but the work must be something that can be perceived, reproduced, or otherwise communicated.

Works of Authorship That Are Protected Literary works, such as books and stories Musical works, including any accompanying words Dramatic works, including any accompanying music Pantomimes and choreographic works (continued)

Works of Authorship That Are Protected (continued) Pictorial, graphic, and sculptural works Motion pictures and other audiovisual works Sound recordings Architectural works

Copyright Infringement Copyright infringement occurs when someone makes unauthorized use of a copyrighted work. Courts consider four factors when determining whether copyright infringement has occurred: (continued)

Copyright Infringement (continued) 1.The purpose of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes 2. The nature (character) of the copyrighted work 3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole 4. The effect of the use on the potential market for, or value of, the copyrighted work

Defenses to Copyright Infringement The fair use doctrine: Criticism Comment News reporting Teaching (including multiple copies for classroom use) Scholarship Research

Copyrights and Sporting Events Broadcast and cable television transmissions of sporting events are fully protected by copyright law, but the events, games, and statistics themselves are not necessarily covered.

Patents Patents may be granted to anyone who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement. A patent cannot be granted for a mere idea, only for the actual invention or a complete description of it. A patent lasts 20 years. After the patent runs out, anyone can use the technology or make the product.

Sport Marketing Communications Sport marketers must be aware that commercial communication (usually in the form of advertising) can be restricted by federal laws. The commercial speech must concern a lawful activity and not be misleading. The state must have a substantial interest in the restriction of the speech. (continued)

Sport Marketing Communications (continued) The regulation must directly advance the state’s interest. The regulation must be no more extensive than necessary to meet the state’s interest.

Ambush Marketing Occurs when a company capitalizes on the goodwill of an event by using tactics to imply an official association with that sport event. The larger and more popular the event is, the more often ambush marketing arises. (continued)

Ambush Marketing (continued) Sport marketers and researchers alike have varying views of the appropriateness and ethics of ambush marketing. Typically, ambush marketing in sport takes one of the following forms: Use of generic phrases Purchase of advertising time within the event broadcast (continued)

Ambush Marketing (continued) Presence in and around the event venue Conducting consumer promotions Offering congratulatory messages

The Right of Publicity and Invasion of Privacy The right of privacy protects against intrusion on a person’s seclusion, the misappropriation of a person’s name or likeness, unreasonable publicity, and placing a person in a false light. The right of publicity prevents the unauthorized commercial use of a person’s name, likeness, or other recognizable aspects of his or her persona. (continued)

The Right of Publicity and Invasion of Privacy (continued) Many court cases related to sport marketing have arisen based on these concepts, but legal lines continue to be blurry regarding them.

Contractual Issues Involving Consumers Several contractual legal issues have emerged related to team fans and their purchase of season tickets. Teams suing their own season-ticket holders for failure to pay Season-ticket holders suing teams and athletics departments for requiring the purchase of a personal seat license (PSL) or for changing policies about seat location relative to personal donation level (continued)

Contractual Issues Involving Consumers (continued) When examining such policies, sport marketers must consider not only legal implications but also public relations implications.

Promotion Law Issues Sweepstakes, contests, and lotteries are popular sport marketing promotional tactics. To use them legally, however, sport marketers must be aware of certain regulations. (continued)

Promotion Law Issues (continued) In particular, marketers must consider the elements of prize, chance, and consideration.

Emerging Issues Several issues are emerging at the intersection of sport marketing and the law: Athletes’ use of social media Athletes’ trademarking of names and slogans Using current and former student-athletes’ likenesses in video games