Insights from the INTA European conference (Madrid)

The International Trademark Association’s (INTA) European conference took place in Madrid this year, gathering a wide range of stakeholders from the sports industry. The theme of “Brands, Sports and Esports: a brand (r)evolution” lent itself to an in-depth discussion of the key intellectual property issues in sports today. In particular, the rise of esports was a recurring topic. Below are some insights into the main themes across the two days.

Sponsorship agreements: protect and anticipate

In sports, sponsorship agreements typically establish the T&Cs of a partnership between two brands or between a sponsor and an event organiser or athlete. Such agreements require bespoke drafting to secure each parties’ rights and anticipate any event likely to impact brand reputation as well as consequences of termination.

A sponsor will want to know which other brands it will be associated with. Companies may also wish to contemplate mechanisms for exiting the agreement in specific circumstances (replacement of the team manager, public reputational issue, breach of brand usage guidelines, etc.). It’s also worth considering that a change in the wider landscape (e.g. national team changing its outfitter, changes in regulation) may ultimately impact the economics of the specific agreement.

While partnerships can provide for the separate use of each of the partners’ brands, it can also be the opportunity to create a new logo, combining the rights of each partner. For example, the “Barclays English Premier League” logo is a combination of the IP rights of the FA Premier League and Barclays bank. In this context, both parties must anticipate the form of collaboration and the manner in which IP rights will be managed, both during, and upon the termination of, the partnership (e.g. the “Barclays English Premier League” logo is co-owned by the two parties).

Sponsorship agreements must also be adapted to an athlete’s personal branding. It is common to see athletes promoting their own brands through a sponsor corporation. For global sporting icons, from Lionel Messi, to Roger Federer and Michael Jordan, sponsorship agreements are becoming a form of partnership agreement. In this way, the sponsor helps the athlete to build his or her personal brand and image through a dedicated logo.

It is important that such agreements consider what will happen to these rights and brands when a partnership ends. For example, whether ownership rights, originally owned by the corporation, should be transferred to athletes. Litigation in this area is not uncommon. Putting these subjects on the table – and into agreements – from the outset could enable the circumvention of such lengthy proceedings.

A shift in the broadcasting landscape: from TV channels to online platforms

The landscape of broadcasting rights for traditional sports has dramatically changed over the last couple of years, moving from a traditional TV arrangement to a “digitalised space”, where social media and video on-demand platforms are more likely to match the needs of the audience. For instance, US Major League Baseball generates higher revenues from Facebook, Instagram and YouTube than from any other communication channel.

Esports is much more accustomed to such platforms (e.g. Twitch or YouTube), as gaming is digital by nature and is generally not promoted through traditional TV. The transmission of esports on television may raise some additional concerns for broadcasters and organisers. Indeed, images of games can be violent (e.g. war simulation) and competitions lengthy (on occasion more than eight hours) and may not be appropriate for all types of audience.

In parallel, the audience itself is becoming a powerful advertising medium for brands. As people move away from consumption through traditional TV it becomes increasingly important to find the right way to reach the audience, in order to promote a sporting event. Brands are looking for ways to “share” the event experience, notably using influencers or providing specific content and insight on individual athletes. The legal challenge is to carefully control the use of brands online and to avoid any unauthorised use of a third-party’s IP rights.

Enforcing IP rights in the field of sport

The greater prevalence of IP rights in sport comes with an equally important mandate to protect and enforce them when required.

This is particularly important to curb “ambush marketing”. This is where corporations or individuals, who are not official sponsors of an event, make references to the event to appear as if they have an official involvement (and thereby interfere with the legitimate marketing activities of official marketing partners). The International Olympic Committee (IOC) regularly issues guidelines on brand protection in the context of the Olympics and dedicated IOC teams monitor the use of relevant IP by partners and third parties. As ambush marketing can take multiple forms, non-official partners of an event should always conduct a risk analysis prior to the launch of any advertising campaign.

This being said, the IOC recently announced a relaxation of the rule which prohibits athletes from promoting their own brands and sponsors while participating in the Olympics. Under pressure from the German antitrust authority, and others, the IOC has relaxed the wording of Rule 40.3 of the Olympic Charter, which has gained notoriety in recent years for setting out the restricted circumstances in which athletes may allow their image or performances to be used for advertising purposes during the Olympics.

As with any industry, sport is in a constant battle against “classic” infringement, such as the sale of fake merchandise. Multiple rightsholders feel aggrieved in such circumstances. For example, the unauthorised manufacture and sale of a football team’s shirt (e.g. Manchester United) may infringe the rights of at least Manchester United, Adidas and Chevrolet. Multiple questions arise in this situation: who should or can be involved in fighting against the infringement? What role should the other partners have in the strategic direction of enforcement efforts? What happens if the offenders were to remove the “Adidas” logo? Can clubs or governing bodies join forces to break-up counterfeiting networks?

Scenarios may be further complicated where infringements are committed by fans (especially on social media). In this situation, the club needs to carefully approach the way the infringement is dealt with and be mindful of reputational impact.

Esports: Are the Olympics within reach?

The potential integration of esports competitions in the Olympics (possibly in Paris 2024) was raised on several occasions (it should be said, by individuals not affiliated with the IOC). The quid pro quo here is that the Olympics offers esports the opportunity to promote itself at an international level and on the most global of stages, while giving the IOC the opportunity to expand its audience and increase revenues. Time will tell whether this could be a match made in heaven.