The Legal Aspects of Sport Marketing Academy of Entertainment & Sports Marketing

The Legal Aspects of Sport Marketing Three 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 Act Protects 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

Licensing 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

Licensing 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 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 Marketing When 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 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… 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 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 Publicity Prevents 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 Privacy Protects 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)

Patents Granted 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 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 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 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 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 Bargaining Groups of employees joining together as a single unit to negotiate with employees

Contracts Agreements enforced by law that detail the transaction of business

Contracts 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.

Contracts 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 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.