Transcript Chapter 14 - Dave Doroghy

C H A P T E R
14
Legal Aspects
of Sport Marketing
Chapter 14 Legal Aspects of Sport Marketing
Objectives
• To introduce the key legal concepts and issues
that affect the marketing of the sport product
• To inform sport marketers about the need, and
the methods used, to protect intellectual
property associated with the creation of a sport
product or event, or with ideas developed out
of sport sponsorship and licensing programs
• To examine the legal limits of sport marketing
and promotion so that sport marketers can
better manage risks and avoid legal liability
Importance of Sport Law Relative
to Sport Marketing
• Without working knowledge of how the law
affects sport marketing, professionals in the
field could risk considerable legal
consequences.
• The law is complex, and sport marketers
often require assistance from trained
lawyers to navigate issues. But having a
basic understanding of key issues is
helpful.
What Is Intellectual Property?
• Primary goal of intellectual property law is
to reward invention, ingenuity, and
creativity in an effort to maintain an open
and competitive marketplace.
• It is made up of three areas:
1. Trademarks
2. Copyrights
3. Patents
Licensing
• A trademark, copyright, or patent owner
may grant permission for its use to others
for a fee.
• When another does not have permission or
licensed rights to use the copyright,
trademark, or patent, that person is said to
be infringing on the rights of the intellectual
property owner.
Trademark Law
• A trademark is a word, name, symbol, or
device used by a person, generally a
manufacturer or merchant, to identify and
distinguish its goods from those
manufactured and sold by others, and to
indicate the source of the goods.
Overview of Trademark Law
• Trademarks serve five purposes:
– Identify the source or origin
– Protect consumers from confusion or deception
– Designate a consistent level of quality
– Represent goodwill of the owner’s products or
services
– Signify a substantial advertising investment
Trademark Protection
• Trademarks are protected on the national
level by the Federal Trademark Act of 1946,
commonly referred to as the Lanham Act
• Types of trademarks:
– Trade dress (product packaging)
– Service mark (service versus tangible product)
– Collective mark (players associations and leagues)
Trademark Registration
• To gain national trademark protection under
the Lanham Act, a trademark must be
registered with the United States Patent and
Trademark Office (USPTO).
• Registered marks gain the following:
– The ability of the trademark owner to sue in federal
court
– The ability to obtain trademark registration in foreign
countries
(continued)
Trademark Registration (continued)
– The opportunity to file the trademark with the U.S.
Customs Service to prevent the importation of
infringing foreign goods
– Acknowledgment and protection of the goodwill of
the trademark holder
– The provision of public notice throughout the nation
of trademark ownership, thus creating an easier
burden of proof in trademark infringement lawsuits
Types of Trademarks
• Fanciful: distinctive
• Arbitrary: common term associated with entity
• Suggestive: connotes something about product
• Descriptive: commonly used word or phrase
that is difficult, although not impossible, to
protect
• Generic: commonly used word or phrase that is
never entitled to trademark protection
Secondary Meaning
• Descriptive logos and marks can gain
trademark protection if they are deemed by
the courts to have acquired secondary
meaning, defined as “a mental recognition
in buyers’ and potential buyers’ minds that
products connected with the symbol or
device emanate from or are associated with
the same source.”
Trademark Infringement
• Reproduction, counterfeiting, or imitating a
registered mark in an attempt to sell or
advertise goods or services that are likely to
cause confusion or deceive without the
consent of the trademark holder
– Traditional trademark infringement—confusion or
mistake, or used to deceive
– False designation of origin
– Dilution
Determining Trademark Infringement
• The strength of the trademark
• The degree of similarity
• The similarity of the products involved
• The market channels involved
• The distribution channels involved
(continued)
Determining Trademark Infringement
(continued)
• The intent of the defendant in adopting the
trademark
• The sophistication of potential consumers
• The evidence of actual confusion
Trademark Infringement
• Claims under which trademark owners
might sue:
– False designation of origin
– Dilution
• Trademark infringement defenses:
– Abandonment
– Fair use defense
– Genericness
– Functionality
Additional Trademark
Protection Issues
• Cybersquatting
• International trademark registration
Copyright Law and Sport Marketing
• Copyrights can protect written works,
music, pictures or graphic designs, and
audiovisual works (including broadcasts of
sporting events).
– Copyright Act of 1976 protects original works of
authorship appearing in any tangible medium of
expression.
– Digital Millennium Copyright Act provides copyright
laws regarding digital creations and the Internet.
(continued)
Copyright Law and Sport Marketing
(continued)
• A copyright can be for something to be
developed later, but the work must be
something that can be perceived,
reproduced, or otherwise communicated.
Works of Authorship
That Are Protected
• Literary works, such as books and stories
• Musical works, including any accompanying
words
• Dramatic works, including any
accompanying music
• Pantomimes and choreographic works
(continued)
Works of Authorship
That Are Protected (continued)
• Pictorial, graphic, and sculptural works
• Motion pictures and other audiovisual
works
• Sound recordings
• Architectural works
Copyright Infringement
• Copyright infringement occurs when
someone makes unauthorized use of a
copyrighted work.
• Courts consider four factors when
determining whether copyright infringement
has occurred:
(continued)
Copyright Infringement (continued)
1.The purpose of the use, including whether such
use is of a commercial nature or is for nonprofit
educational purposes
2.The nature (character) of the copyrighted work
3.The amount and substantiality of the portion
used in relation to the copyrighted work as a
whole
4.The effect of the use on the potential market for,
or value of, the copyrighted work
Defenses to Copyright Infringement
The fair use doctrine:
• Criticism
• Comment
• News reporting
• Teaching (including multiple copies for
classroom use)
• Scholarship
• Research
Copyrights and Sporting Events
• Broadcast and cable television
transmissions of sporting events are fully
protected by copyright law, but the events,
games, and statistics themselves are not
necessarily covered.
Patents
• Patents may be granted to anyone who invents
or discovers any new and useful process,
machine, manufacture, or composition of
matter, or any new and useful improvement.
• A patent cannot be granted for a mere idea,
only for the actual invention or a complete
description of it.
• A patent lasts 20 years. After the patent runs
out, anyone can use the technology or make
the product.
Sport Marketing Communications
• Sport marketers must be aware that
commercial communication (usually in the
form of advertising) can be restricted by
federal laws.
– The commercial speech must concern a lawful
activity and not be misleading.
– The state must have a substantial interest in the
restriction of the speech.
(continued)
Sport Marketing Communications
(continued)
– The regulation must directly advance the state’s
interest.
– The regulation must be no more extensive than
necessary to meet the state’s interest.
Ambush Marketing
• Occurs when a company capitalizes on the
goodwill of an event by using tactics to
imply an official association with that sport
event.
• The larger and more popular the event is,
the more often ambush marketing arises.
(continued)
Ambush Marketing (continued)
• Sport marketers and researchers alike have
varying views of the appropriateness and
ethics of ambush marketing.
• Typically, ambush marketing in sport takes
one of the following forms:
– Use of generic phrases
– Purchase of advertising time within the event
broadcast
(continued)
Ambush Marketing (continued)
– Presence in and around the event venue
– Conducting consumer promotions
– Offering congratulatory messages
The Right of Publicity
and Invasion of Privacy
• The right of privacy protects against
intrusion on a person’s seclusion, the
misappropriation of a person’s name or
likeness, unreasonable publicity, and
placing a person in a false light.
• The right of publicity prevents the
unauthorized commercial use of a person’s
name, likeness, or other recognizable
aspects of his or her persona.
(continued)
The Right of Publicity
and Invasion of Privacy (continued)
• Many court cases related to sport marketing
have arisen based on these concepts, but
legal lines continue to be blurry regarding
them.
Contractual Issues
Involving Consumers
• Several contractual legal issues have
emerged related to team fans and their
purchase of season tickets.
– Teams suing their own season-ticket holders for
failure to pay
– Season-ticket holders suing teams and athletics
departments for requiring the purchase of a personal
seat license (PSL) or for changing policies about
seat location relative to personal donation level
(continued)
Contractual Issues Involving
Consumers (continued)
• When examining such policies, sport
marketers must consider not only legal
implications but also public relations
implications.
Promotion Law Issues
• Sweepstakes, contests, and lotteries are
popular sport marketing promotional
tactics.
• To use them legally, however, sport
marketers must be aware of certain
regulations.
(continued)
Promotion Law Issues (continued)
• In particular, marketers must consider the
elements of
– prize,
– chance, and
– consideration.
Emerging Issues
• Several issues are emerging at the
intersection of sport marketing and the law:
– Athletes’ use of social media
– Athletes’ trademarking of names and slogans
– Using current and former student-athletes’
likenesses in video games