Sports and Intellectual Property

Intellectual property (IP) rights (patents, industrial designs, trademarks, copyrights, etc.) are usually associated with an industry, usually manufacturing. Intellectual property rights give the owner of the intellectual property rights exclusive rights for a limited period of time. But organizers of sports events are using intellectual property laws to capitalize on interest in particular sports.

Physical activity was originally a hobby or recreational activity that enabled participants to enjoy exercise or as a form of physical exercise. Certain games have now evolved into large international events, or more properly international businesses with their own “tailor-made” laws. Such international events even challenge the law of national sovereignty.

Popular events such as football, golf, tennis, basketball, cricket, yachting, motorsports, etc. have grown into international events with a large following, creating huge marketing potential for the organizers. Organizers of popular tournaments like FIFA (football), PGA (golf), NBA (basketball) organize and manage events, often international, in a way that captures the maximum value from others who want to take advantage of the marketing potential offered by the event.

Organizers initially create a unique logo, emblem or phrase to identify the event. If a logo or emblem is original, they will also be protected as a copyrighted work.

For example, the emblem of the 2010 FIFA World Cup is protected by copyright law as a trademark and as a work of art. Terms such as “2010 FIFA World Cup South Africa”, “2010 FIFA World Cup”, “2010 World Cup”, “Football World Cup” and similar derivatives thereof are also protected from unauthorized use and are governed by the respective jurisdictions Bound by Applicable Law.

As logos/badges/phrases (“event identifiers”) are heavily publicized in major media, they are easily and quickly associated with the event by the public, thereby gaining strong trademark value. Event organizers then go on to use the trademark value for other businesses.

Let’s look at the various sources of income for organizers. The first line of income is sponsorship fees. This includes the right to display the Sponsor’s logo on the playing field/stadium, the right to use the Event Identifier on items manufactured by the Sponsor, or the right to use the Event Identifier in connection with the Services (e.g. bank, credit card (VISA) ), Business Process Outsourcing (Mahindra Satyam)), or placement rights (for example, a luxury watch brand adjacent to a golf course tee).

The second line of income is access control. Even here, the printing of tickets may be sponsored – tickets bearing the sponsor’s logo.

The third source of income is the exclusive supply of competition products such as footballs, tennis balls, shuttlecocks (badminton), fuel and lubricants (racing cars), etc. Suppliers of articles have the right to promote their articles by calling themselves “official suppliers” and to advertise themselves as the exclusive suppliers of such articles. Ironically, although adidas was the top sponsor/partner of the 2010 FIFA World Cup, it was Nike that grabbed more of the audience’s attention, whether it was through the players’ football boots or clever advertising placements. Is this a case of poor Adidas sponsorship strategy?

A fourth revenue stream, and an increasingly lucrative one, is the exclusive rights to record and broadcast events via television and radio, and possibly the Internet in the near future. Broadcasting rights are granted to regional and national broadcasting networks. All copyrights in recording and broadcasting of the competition are reserved by Sponsor or licensed to specific entities.

Finally, the organizers also grant the manufacturer the exclusive right to manufacture and sell mascot merchandise or products bearing the event identifier in exchange for payment of royalties.

Organizers have a wide range of sources of income, namely:

1. Sponsorship fee
2. Door collection
3. Exclusive right to use the event product
4. Rebroadcasting rights
5. Merchandise rights

In addition to tournament organizers, other manufacturers and service providers also profit by sponsoring sportswear and game equipment for specific teams or players. Just consider the brands of players’ t-shirts, shorts, caps, gloves, shoes, socks, and more. In South Africa, the non-sponsor-branded shoes worn by players are as prominent (if not more prominent) than those of one of the official sponsors. As a racing driver, have you ever seen the overalls of a plain driver? On the contrary, the overall equipment of the driver, including the helmet, is often plastered with various trademarks.

Even sponsor the snacks/drinks that the player consumes during the game, taking full advantage of the advertising value. The advertisement of the trademark here is not the advertisement of the product, as it appears in TV commercials, but the trademark or product is intrinsically connected with the successful player. What more convincing message could be produced if not a world-class player using an advertiser’s product?

In addition to the income earned by sponsors as described above, athletes, especially top athletes in competitions, often endorse sports-related or even non-sports products or services or businesses. For example, Tiger Woods not only endorsed golf clubs, balls, t-shirts, hats, etc., but also watches, consulting services, and personal hygiene products (note: he was later suspended/struck by the latter two for violations); Maria Sarah Maria Sharapova, one of the top female tennis players, endorses footwear and clothing, cameras and watches; soccer player Ronaldinho has endorsement deals with Pepsi, Nike and Sony.

In order to maximize profits from the revenue stream, organizers of major events such as FIFA must strictly enforce their trademark rights and take action against those who use their trademarks without the organizers’ consent. Unless organizers take serious action against infringers, they are unlikely to demand high sponsorship fees for future events, let alone the possibility of possible breaches of sponsorship contracts.

Unfortunately, intellectual property law was not designed for such recurrent international events. Many manufacturers or service providers would like to be associated with such an important international event attracting billions of television viewers, but they either do not have the opportunity or cannot afford the fees and costs. Therefore, they try to associate their products/services with the event without the consent of the event organizer. This is where “ambush marketing” comes into play. Event organizers have an opportunity to take action against such marketers. But it’s unclear whether a particular event or advertisement would constitute ambush marketing under traditional intellectual property law. To avoid this, countries, especially host countries, often need to enact specific laws to deal with ambush marketing before they get the chance to host an event. The UK had to develop the London 2006 Olympic and Paralympic Games Bill before the London 2012 Games. The ‘London 2012’ trademark is protected.

The next question is how and in what way the revenue earned from events such as the 2010 FIFA World Cup is used. Who benefits from the income? That will be a topic for another article.

Note: Trademarks and designs identified in this article belong to their respective owners. The author does not claim any ownership rights; they are for educational purposes only.

About the author


Leave a Comment