Archive for the ‘Sports Licenses’ Category

Sports Licensing Corner: They Call Alabama The Crimson Tide (TM)

Thursday, July 22nd, 2010

"The Sack," by Daniel Moore

If an artist depicts a trademark in his work, is it art or trademark infringement?

In a case that has already been in litigation for five years, a federal trial judge has ruled in University of Alabama vs. New Life Art, Inc. that artist Daniel A. Moore infringed the University of Alabama’s trademarks when he sold paintings, posters, mugs, calendars, and other Bama sports memorabilia, but also ruled that the paintings and posters were nevertheless exempt as artistic expressions protected under the First Amendment.

Given the large amounts of money generated by college sports licensing, the case has struck a nerve– Alabama has filed an appeal to the federal Eleventh Circuit Court of Appeals, and 27 other universities have requested to file an amicus brief in support of the university.

Moore has estimated that his football art tallied sales “in the low millions,” during his 30 year career. From 1991 until 2000, Moore’s company New Life Art, Inc. had a license agreement under which it paid royalties to the University of Alabama, but then Moore insisted that the law did not require his paintings to be licensed, especially when his posters in most cases depicted no explicit trademark material.

Not so, replied the University of Alabama, arguing that all of Moore’s artwork at least portrayed Bama’s famous crimson and white “Crimson Tide” team colors, which the University argued is its trade dress –packaging that identifies University of Alabama sports products and services in the public mind– and that Moore’s depiction of it would likely mislead the consuming public into thinking his paintings were manufactured, sponsored, endorsed, or affiliated with the University.

Judge Robert Propst agreed that Bama’s team colors had attained trade dress status, and that there was some, albeit small, likelihood that the public would be confused as to the University’s creation or sponsorship of Moore’s art.

However, he ruled that at least as regards his large scale paintings and posters, Moore’s work had “high artistic skill” and expressive content; his use of the Bama colors had artistic relevance to his work, and did not intentionally mislead the public as to the University’s sponsorship or affiliation with it; therefore it was protected by the First Amendment, which superseded the University’s trademark infringement claims made under the Lanham Act.

The mugs, calendars, and other souvenir paraphernalia did not contain significant artistic content and therefore were held to be infringing.

As support, the judge quoted at length from another famous sports art case, ETW Corp. vs. Jireh Publishing, Inc., in which the Sixth Circuit Court Of Appeals held that an artist’s limited edition poster portraying Tiger Woods’ historic first Masters golf tournament championship was not an infringement of Woods’ trademarks in his name and images, because some of Woods’ claimed trademarks were not actually trademarks at all, while the use of other trademarks was either de minimus or protected by the artist’s exercise of his First Amendment rights.

Even if Moore ultimately prevails, it is unlikely that there will be a huge economic impact on university sports licensing. Both Moore’s paintings and the Tiger Woods posters were not mass-market items, but more of the “limited edition/collectors item” variety, with high artistic skill and a relatively high price tag. However, Bama and other big sports universities are playing to win.

Sports Licensing Corner: Licensing Revolution on the Campuses?

Monday, March 8th, 2010

An antitrust lawsuit brought by a former UCLA basketball star has the potential to upend the cozy, lucrative world of collegiate sports licensing, and even to make fundamental changes to the amateur nature of college sports.

Collegiate licensing is a $4 billion a year industry, about 80% of which is handled by the Collegiate Licensing Company (“CLC”), official licensing agent to the NCAA and over 200 universities.

One of the foundations of that industry is that college athletes are required to sign documents that relinquish in perpetuity their rights of publicity for college sports-related purposes, as a condition of participating in NCAA-sponsored college athletics. That means the NCAA can, without compensation to the athletes, license their names and images for apparel, video games, broadcasts, and highlight DVDs, long after they have graduated from college.

Ed O’Bannon, a former basketball star at UCLA during the 1990s, said he got angry seeing his highlight clips from 15 years ago being used to promote NCAA broadcasts, so last July he filed a class action lawsuit against the NCAA and CLC in federal District Court in San Francisco on behalf of himself and other former student-athletes.

The nub of O’Bannon’s legal argument is that requiring student athletes to sign away their rights of publicity in perpetuity is a violation of Section 1 of the Sherman Antitrust Act. Section 1 prohibits, “Every contract, combination…, or conspiracy, in restraint of trade or commerce among the several States….”

Agreements among the NCAA, CLC, and NCAA member universities, as well as the students’ relinquishments of their rights of publicity, are obviously “contracts,” so the next question under Section 1 is whether these contracts unreasonably restrain trade in a particular market. The NCAA will probably argue that: 1) the former athletes should not be able to bring an antitrust lawsuit in the first place, because they validly traded their rights of publicity for room, board, and tuition provided under their athletic scholarships; and 2) prohibiting college athletes from receiving payments for their athletic skills preserves the amateur nature of the college game, and therefore promotes, not restrains, competition in the market for college sports and sports products.

O’Bannon is likely to reply that: 1) requiring a college freshman to sign away his intellectual property rights in perpetuity without the presence of an attorney is invalid; and 2) assuming that amateurism by college athletes increases competition in the market for college sports, it is totally irrelevant to former athletes, who are no longer playing in games. O’Bannon argues that the NCAA, by prohibiting the former student-athletes from cutting their own apparel or video game licensing deals, is lessening competition, decreasing innovation, eliminating compensation to former athletes, and increasing prices to college sports fans, in violation of the Sherman Antitrust Act.

Indeed, by limiting their lawsuit to former students, the O’Bannon plaintiffs have considerably strengthened the legal arguments of their case.

The O’Bannon plaintiffs recently survived the defendants’ motion to dismiss the case before trial, but there is plenty of game left to play, sports fans. With so much money at stake, it is likely that no matter which side wins, there will be years of appeals before the matter is finally settled.

But if O’Bannon wins, the NCAA, CLC, and many college athletic departments could take a large financial hit. They all derive substantial revenue from that $4 billion in licensing fees, but the O’Bannon plaintiffs would claim a major (as yet unspecified) chunk as compensation to former student-athletes whose rights of publicity were utilized in licensing deals. In fact, antitrust law allows victorious plaintiffs to triple their damages. And of course the former college athletes would have the right to cut their own licensing deals going forward, independent of the NCAA and their alma maters.

Furthermore, if O’Bannon wins, it is possible that current college athletes might utilize the rationale in any O’Bannon victory to attempt to weaken or throw out the current system of signing their rights of publicity over to the NCAA and CLC. For example, if the court were to rule the waivers were defective because the NCAA failed to advise students that they should seek legal counsel before signing away rights to future compensation for their intellectual property, then current athletes might argue they too should have the right to be represented by counsel in negotiating rights waivers during their college playing careers. Then star college athletes could get embroiled in contract negotiations, just like professional athletes.

Stay tuned, licensing and college sports fans…

Sports Licensing Corner: When a Tattoo Costs an Arm and a Leg— Basketball Star Gets Schooled In IP Law

Wednesday, February 3rd, 2010
I told the 'guy to ink a "T," not a "C"!

Rasheed says: "I told the guy to ink a 'T,' not a 'C'!"

Here is an oldie but goodie from the worlds of sports licensing, which again reminds us that IP assignment agreements are not just for the rarefied world of lab researchers, but for the nitty gritty worlds of tattoo artists and technical foul prone power fowards as well.

Back when he was playing for the Portland Trail Blazers, basketball star Rasheed Wallace got an elaborate tattoo on his upper right arm depicting an ancient Egyptian royal family with the sun in the background (see photos here and here). For a fee of $450, Portland tattoo artist Matthew Reed created preliminary sketches of the tattoo for Wallace’s approval, then applied ink and needle to skin. Reed and Wallace signed a one page contract, but it was silent on who owned the intellectual property in the tattoo.

Wallace appeared in a Nike television commercial which focused on the tattoo in close up, and included an animation simulating the tattoo’s creation, with voiceover from Wallace explaining the meaning of the symbols.

Reed, surprised that his $450 creation was the focus of a multimillion dollar advertising campaign, sued Wallace, Nike, and its advertising agency for infringement of his copyright.

Why? How?

A person who creates intellectual property as an independent contractor generally owns that IP, in the absence of an agreement to the contrary. As mentioned, the contract between Reed and Wallace was silent on the issue of copyright ownership, so it could not be considered an assignment of copyright, and the tattoo did not fit one of the work made for hire categories, so it could not be considered a work made for hire. Since Reed was an independent contractor, the ownership of the copyright in the tattoo remained with him. Which meant that anyone who reproduced the tattoo without a license from Reed was infringing his copyright.

The lawsuit was settled confidentially, but it is likely that Reed walked away with a lot more than the original $450 fee.

So what rights did Wallace get for his $450? Wallace owns the physical manifestation of the tattoo, and has the right to display it to people in the same physical location, but has no right to make or sell reproductions, such as photographs or video, or to create derivative works, such as animations based on the tattoo. Similarly, the purchaser of a painting who does not obtain an assignment of copyright from the painter owns the canvas, and implicitly has the right to sell the original canvas or even destroy it, but does not have the right to make or sell copies of the painting on the canvas.

And it probably would not have helped Wallace’s case even if he proved that he conceived of the “idea” for the tattoo, because copyright does not protect ideas or concepts (e.g. the concept of an Egyptian royal family and a sun), only the expression of those ideas (e.g. an actual image of an Egyptian royal family and a sun).

Takeaway: when purchasing artwork, video, text, or other creative works that you may wish to make available to a broader audience, make sure that you have a written agreement with the seller/licensor either transferring ownership of the copyright to you, or licensing reproduction rights to you (coupled with a guarantee that he is indeed authorized to license those rights to you). Otherwise, you could get “tattooed” like Rasheed Wallace.