The Legal Aspects of The Legal Aspects of Sport MarketingSport Marketing

Academy of Entertainment & Sports Marketing

The Legal Aspects of Sport MarketingThree Areas of Intellectual Property

Copyrights – protect original works of authorship

Trademarks – protect unique words, names, and symbols

Patents – protect inventions

Fair Use Doctrine Common defense to a copyright infringement

claim

Allows for fair use of copyrighted work “for purposes such as criticism, comment, new reporting, teaching, scholarship, or research.”

Copyrights and Sport Events Only broadcast or cable transmissions of sport

events can be copyrighted

Sport events not protected by copyright law because they are not authored (there is no script).

The Lanham ActProtects 4 distinct marks: Trademarks – words, names, or symbols used

to identify a company’s goods Service marks –words, names or symbols used

to identify a company’s service (pro sports logos)

Certification marks – words, names, or symbols used to certify a region, a material, a mode of manufacture, quality, accuracy or other characteristics of a person’s goods or services.

Collective marks –trade or service marks used by members of a cooperative or union (pro sports players’ associations)

Benefits Derived by Registering Marks Invokes jurisdiction of the federal court system

for future legal action Basis for obtaining mark registration in a foreign

country Filed with US Customs to prevent the importation

of infringing foreign goods Protects companies from counterfeited products Symbolizes and protects the “good will” of

companies with their consumers Protects consumers from confusion and

deception about products and services Provides public notice about companies claim to

products and services

Important Legal Terms Liable – legally responsible for damages Risk – the possibility of financial loss or personal

injury Negligence – Unintentional act that injures;

“avoidable accidents” that should have been prevented by taking precaution.

Proximate Cause – connection between negligent act and the injury

Duty – Act with reasonable care toward others so as not to create an unreasonable risk of harm.

Breach of Duty – failure to meet one’s obligations

LicensingLicensing A legal contract that grants a licensee

the right to use the trademark of a company (sports team/league) on its products

Pro sports, college ports and major sports events (World Cup, Olympics) are licensing their “brand” names and logos to generate revenues

LicensingLicensing

Licensor – Company or individual granting the license

Licensee – The company or individual paying for the rights to use the licensor’s name or property.

Impact of Licensing to ConsumersImpact of Licensing to Consumers

Increased opportunity to associate with an athlete, sports team, entertainer, or corporation.

Increased supply of available products

Competition can result in lower prices, new products, and better quality

Ambush MarketingAmbush MarketingWhen an advertiser capitalizes on the attention

given to a sport event by using tactics to imply an “official” association with the sport

event when they, in fact, did not pay a “rights fee” to the sport event to obtain an “official”

association with the sport event.

Types of Ambush MarketingTypes of Ambush Marketing Non-sponsors purchase advertising time in

and around the sport event broadcasts Company is not an “official” sponsor of a sport

event but is a broadcast sponsor of a sport event

Ambush Marketing Cont…Ambush Marketing Cont… Non sponsors negotiate advertising directly

with teams or athletes at a much lower cost than paying for a sponsorship

Non sponsors use a good luck or congratulatory message or banner to associate with the sport event

Non sponsors conduct promotions in and around the sport event

Actions to Prevent Ambush Marketing Include in broadcast contracts a clause

requiring the licensee (network) to monitor infringements

Negotiate with the host city and the event site to ban advertising that competes with the “official” sponsors

Preventing Ambush MarketingPreventing Ambush Marketing Conduct a public relations campaign accusing

ambushers of using ambush marketing tactics and that they are not “official” sponsors of the event

Take one or more of the following legal actions: misrepresentation, misappropriation of one’s name and likeness; defamation (libel and slander) and false advertising

The Right of PublicityThe Right of PublicityPrevents the unauthorized commercial use of

an individual’s name, likeness, or other recognizable aspects of his or her persona.

Athletes know the commercial value of their names and likenesses and the right of publicity is critical for the “branding” of athletes.

The Rights of PrivacyThe Rights of PrivacyProtects against: intrusion upon one’s seclusion the misappropriation of one’s name or

likeness Unreasonable publicity Placing one in a false light (protects one’s

psyche)

PatentsPatentsGranted to anyone who invents or discovers any

new and useful process, machine,manufacture, or composition of matter, or any anew and useful improvement.

Patents in SportsPatents in Sports Inventions of sports equipment

Applications of technology to sports

New methods or processes for playing sport (James Foster’s Arena Football League is patented)

The InternetThe Internet The law of cyberspace is in its infancy

Numerous lawsuits have commenced nationally to regulate internet use and its impact on privacy and property rights

Few legal precedents have been established

The law in this area will be established on a case by case basis eventually establishing legal precedents

Important LawsImportant Laws Sherman Antitrust Act - Restraint of trade and

monopolies are illegal; NFL is excluded.

Clayton Act – Granted rights to organized labor to confront violations of Sherman Act

National Labor Relations Act – Granted right to organized labor to collectively bargain and strike

Recording Industry Association of Recording Industry Association of America (RIAA)America (RIAA) Regards file sharing as theft and aggressively

prosecutes violators.

Sampling – the act of taking a portion of one sound recording and reusing it as an instrument or a sound recording in a different song or piece.

Collective BargainingCollective Bargaining Groups of employees joining together as a

single unit to negotiate with employees

ContractsContracts Agreements enforced by law that detail the

transaction of business

ContractsContracts Expressed Contract – contract in which all

elements aare specifically stated and the terms are stated.

Implied Contract – agreement which is found to exist based on the circumstances when to deny a contract would be unfair and/or result in unjust enrichment to one of the parties.

ContractsContracts Unilateral Contracts – one-sided contract, where

the offeror makes a promise in exchange for an act by the offeree. If the offeree acts on the offerers promis, the offeror is legally obligated to fulfill the contract. However, the oferee cannot be forced to act.

Bilateral Contracts – promise made by one party in exchange for the performance of some act by the other party. Both parties are bound by their exchange.

For example, if someone offered to drive you to work on Mondays and Tuesdays in exchange for your promise to return the favor on Wednesdays and Thursdays, a bilateral contract would be formed binding both of you once you provided consideration by accepting those terms. But if that same person offered to pay you $10 each day you drove him to work, a unilateral contract would be formed, binding only upon the promisor until you provided consideration by driving him to work on a particular day.

Noncompete ClauseNoncompete Clause Prohibits a person from working in a

competing business for a specific period of time.

Usually not allowed on sports teams. Found in everyday business to prevent trade secrets from getting out to competitors.