The sports industry is an ever-growing global spectacle, relevant to every society. It is a culmination of games, entertainment, commercial business, and culture. The role of Intellectual Property Rights (IPRs) is noteworthy in the sports domain. IPRs are found in almost every aspect of the sports industry. Each kind of Intellectual Property (IP), whether trademarks, copyright, industrial designs, or patents, form an integral part of the commercial sports industry. Patents boost technological advancements that result in better sporting gear. Trademarks and industrial designs contribute to the distinct identity of events, logos, sportspersons, teams, and their equipment. Copyright generates the revenues needed for broadcasters to invest in the expensive task of broadcasting sports events to fans internationally. Therefore, IPRs in the sports industry entail protection to avoid any disputes that may arise.
Popular sports such as cricket, football, tennis, car racing, amongst others, have evolved into international sporting events with a huge fan following, making way for massive marketing potential for organizers. The same is the reason why sports franchisees are tapping into and capitalizing upon various IPRs created by sports. It is then utilized as advertising, merchandising, licensing, etc. for generating brand equity and reputation, in turn, making large profits. There are instances from sports teams to even individuals who have started making their brands, logos, and taglines, which are trademarked and used commercially to obtain benefits. The commercial quotient in sports has skyrocketed significantly in the past few years.
With the inception of branding of sports events through the presence of features such as logos, captions, taglines, slogans, and team names, etc., brand value is created in sporting teams, clubs, players, merchandise, etc. Team names and symbols create a level of association with the public, and fan following helps the popularity ratings of any given team, club, or player. This popularity and brand image ultimately result in monetary profit through advertisements, brand ambassadors, goodwill, and reputation of the sponsors, and so on.
Personality rights play an exclusive role in the brand creation of individual sports players and teams. Celebrity status results in various kinds of image creation, brand endorsement, and revenue generation. The federations, organizers, team owners, and sports gear manufacturers must opt for registration of their team names, logos, venues, captions, taglines, and slogans registered as trademarks. An initiative on the part of the players to register their names and slogans as trademarks is required; for instance, the famous football player Lionel Messi was recently allowed a trademark registration on ‘Messi’ by the European Court of Justice, ruling that there is no likelihood of confusion with an earlier registered mark ‘Massi.’ A simple association of a team’s name often results in misuse of the name of the sportsperson by brands for their commercial benefits. Sourav Ganguly, who had returned from Lords, found that Tata Tea Ltd. was promoting itself by providing in each tea packet a postcard to consumers to congratulate Sourav Ganguly. In a way, this was creating an impression that Ganguly was associated with Tata Tea. The court ruled in favor of Ganguly by stating that his fame and popularity is his IP.
An equally important IP in the sports domain is aesthetics protected by design-specific IPRs. Industrial designs are the key to making a product attractive and desirable. Brands spend vast amounts of resources on understanding consumers’ preferences and creating stylish and appealing product designs to capture valuable market sectors. These designs often become their most valuable assets.
The Patent System has proved to be a prominent incentive to innovate with an equally integral societal benefit of improving the common pool of knowledge and motivating others to build on and advance the current state of the art, thereby setting a good cycle in motion. The sports industry is an industry that directly utilizes and benefits from the patent system. Sporting equipment is continuously evolving. Novel technologies help sportspersons jump higher, swim faster, cycle longer, hit a ball harder and farther, and so on. Safety also progresses with technologies that reduce impact and stress on the athletes’ bodies. There are numerous utility patents concerning sports.
Sports generate a significant number of trade secrets that play a crucial role in competitive advantage and value creation. Sports teams gather proprietary information in the form of statistical analysis, scouting reports, dietary regimens, physiological metrics, and psychological assessment methods – to gain a possible competitive advantage over their rivals. Sports equipment often comprises secret new compounds and materials to allow sportspersons to perform better. Companies invest heavily in huge focus groups to find the right blend of features and designs to make their products more attractive and marketable.
Domain names, which are also treated as trademarks by courts, play a significant role in safeguarding the IPRs associated with sports. Vast information is disseminated, and events are broadcasted, including online games related to sporting events through the internet, which have not only attained an immense market share in branding and value creation but have also given chances to cyber squatters to take the benefit of the confusion, which is connected exclusively to domain names. The websites have become a good source of advertising as well as brand building and popularity. In a bid to engage the public and build up brand recognition, many sponsors conduct online competitions, online ticket sales for sporting events, online shopping portals for the sale of merchandise, etc., since the internet is a cost-effective method to reach out to the public, and generate awareness about a sporting event. Domain names help in building brand image and performing search engine optimization. It has become vital to register multiple domain names with different permutations and combinations to safeguard sports enthusiasts, fans, merchandise buyers, online gamers, and information seekers from committing errors leading to deviation of traffic to unauthorized websites hosted by cyber squatters.
Sports organizations can significantly boost income potential through licensing patents, trademarks, and copyrights while still upholding complete ownership. The same implies that the original owner of the right still has a claim to that patent, trademark, or copyright, but that he or she did allow another party to use the rights in exchange for a price.
A trademark license defines the legal relationship between the trademark owner and a producer. The licensee will produce and distribute the product with the trademarked idea (such as a name or logo), whereas the licensor will manage the quality of the product to maintain the trademark’s reputation.
A technology license is an analogous concept that relates more to equipment-related ideas. Businesses who license out their technologies can enjoy an enhancement in income from larger production and distribution, while companies who obtain the license can manufacture and sell the newest apparatus and uphold competitive drive.
Sponsorship is another marketing prospect for companies looking to capitalize on major sporting events such as FIFA World Cup, IPL, etc. Sponsors typically gain the rights to brand association, media interaction, and other perquisites depending on their level of sponsorship and the event in question.
The royalties that broadcasters earn from selling their exclusive footage to other media outlets enable them to invest in the expensive organizational and technical enterprise involved in broadcasting sports events to fans around the world. The same is made plausible through the safeguards that the IP regime offers for their broadcasting rights. Under the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention) of 1961, broadcasters have exclusive rights for 20 years to authorize rebroadcasting, ‘fixation’ (recording), reproduction, and communication to the public of their broadcasts.
Ambush marketing is one of the most significant areas of IPRs in sports. The most popular example of ambush marketing is the well-known controversy between Coca Cola and Pepsi over the official status of the cola for the cricket world cup tournament of 1996-97, wherein Coca Cola released an ad claiming to be the ‘OFFICIAL COLA’ of the tournament and Pepsi released out a competing ad with the slogan “there is NOTHING OFFICIAL about it.” Ambush marketing refers to businesses promoting their brands or products by correlating them with a team, league, or event – without paying for the privilege. Companies advertise themselves at events where they are not official sponsors. Some common ambush marketing tactics are: flying branded blimps around sporting venues, which are seen by people and recorded in the television coverage, distributing free merchandise at the venue, showing ads wishing teams’ good luck, and using event tickets as prizes.
Causes of IP Disputes in Sports
Several legal issues can arise in the sports industry, including infringement of trademarks, brand abuse, misbranding, misuse in bad faith, using the name of a sports personality without permission or without paying any license fee or royalty, Copyright Infringement about the copyrighted merchandise, sports equipment, artwork in logo, broadcasting without a license, piracy in audio-visual recordings, infringement in promotional material used, use of copyrighted software without license or royalty, infringement of design, use of design without a license, use of design for promotion of other goods and in case of patents, the use of patented technology without authorization from the owner of the patent.
These matters can cause damage to goodwill and lead to unfair trade practice, unfair competition, commercial disputes, and ultimately huge commercial losses, which would defeat the principal purpose of exploring the commercial aspect of the sports industry.
Tackling IP Disputes in Sports
Tackling the various issues that may arise about any sporting event or sportsperson can be done by taking proactive and prompt action in the following ways:
The business of sports is now a global matter, generating jobs and providing livelihoods for employees of broadcasters, manufacturers, advertisers, and others across the world. The commercialization of sports is on a large scale. IP protection and incentives allow businesses and individuals to flourish in their quest for innovation and brand development, which creates a synergistic and strengthening effect. The development of new technologies strengthens a given brand, and the strengthening of a given brand leads to the development of new technologies and products, which, in turn, strengthens the brand. Moreover, the popularity of a given sport results in the development of connected industries and technologies. Similarly, there is a powerful interdependence between individual players, their sports, their teams, the respective leagues, and related industries, including branding, sporting goods, and sportswear.
Designs make a sports product or an event more attractive to the consumers and add to its commercial value. The strategic use of trademarks enables businesses to build their goodwill and stand apart from competitors. Fans have a deep connection with teams, sports clubs, players, and its merchandise, which have to be protected under the trademark law. Top sportspersons get their name as well as personal brands registered as doing the same has enormous revenue generation potential and helps prevent the unauthorized use in any manner. Copyright is indispensable to sports. Media companies pay colossal amounts of money to obtain the exclusive broadcasting rights of sporting events. The royalties that broadcasters earn from selling their exclusive footage to other media outlets enable them to invest in the technology and logistics involved in broadcasting events to thousands of fans across the world.
Sports associations and clubs invest large sums of money in sporting events due to which IP protection is required to safeguard not only their interests but also the interests of the sportspersons. The infringement of IPRs can cause damage to the goodwill and lead to massive commercial losses, which ultimately affects the overall development of the sports industry. Therefore, it is integral to protect and enforce IPRs in the sports domain, which helps in creating a thriving commercial ecosystem for sports and all of its related industries.