Character sports merchandising: international legal issues: the legal and practical ways and means of protecting the subject matter in the UK, the rest of Europe and internationally.

• Author: Williams, Karen
• Position: ARTICLES - Report

Character Sports Merchandising v Character Merchandising

In the past classic 'character merchandising' has been more concerned with the merchandising of purely fictional characters (1) and as recently as 2006, in the words if Mintel:

"At first glance the character license market is full of appeal ... With so many characters and so much industry marketing 'noise' surely the market is buoyant. In reality the market is in trouble. According to market estimates generated by Mintel, the UK character license market is estimated at [pounds sterling]3.3 billion in 2005 (2) and market values have been falling consistently since 1999. This pattern is mirrored in the US" It is acknowledged in the report that the industry may have 'over-targeted' the young (3) and the introduction of a debate as to whether there is an increasing competitive threat from music and sport (4). Indeed, Mintel urge the expansion into areas of more appeal to adults including sport (5). This recommendation of Mintel can either be perceived as old-fashioned, in the sense that current analysis of the character merchandising market perceives character sports marketing as being included within the character merchandising market (and that is has been for some time), or prophetic (in that it certainly is now). Either way, the current understanding of character merchandising is more comprehensively understood to, "take many forms in addition to a fictional character; it may be, for example, a real person, a sports or other public event, a film or television series, a pop group or sports club or university or other institution, or exhibition (6)" and as such forms part of a far larger, more lucrative market with a far broader demographic reach.

Character sports merchandising can be considered to take in merchandising underpinned by:

i. a (fictional/representative) character primarily based on the persona or endorsement of a well known sports-personality (from hereon in "sports character merchandising");

ii. a fictional character depicting a competition, event or league; or

iii. a fictional character representing a sports club.

As such it can be seen that the genre of 'sports character merchandising' is one that in fact operates across the boundaries of character merchandising and personality merchandising (and endorsement, although Laddie J. (7) and other commentators may have split opinions (8)), whereas (ii) and (iii) are more closely affiliated to event merchandising and brand merchandising. In fact the merchandising opportunities relating to exploiting (ii) and (iii) are based fundamentally on trade mark law, whereas the area of sports character merchandising is one largely based on the individual sports person's ability to protect the use of his/her name and/or image in connection with merchandising which protection can be based on a mixture of interlinking intellectual property disciplines which can include trademark law but which also extend to other intellectual property strands such as 'passing off', copyright, design right and the rather more diaphanous "image rights" (also known variously in different jurisictions as publicity rights, personality rights, right of privacy, character rights etc). Taubman Antony expresses the issues with the nature of these rights well (9), "[t]he right of personality has an unsettled, hybrid quality, lacking coherence as a distinct legal doctrine. One may query the utility of this omnibus concept, given the diverse areas of law ushered beneath this umbrella: personality cases include statutory rights to privacy and publicity; conventional and expanded passing off; privacy; confidentiality; equity providing a fusion of confidentiality and human rights law; unfair competition and trade practices (including trade descriptions);moral rights; libel; malicious falsehood and trespass to the person; and trade marks".

The figures at stake can be astronomical and a canny sportsman can more than quadruple or more his/her income by playing the 'merchandising game'. Tiger Woods, for example, is reportedly (10) well on his way to becoming the first $1billion athlete, leading the way in 2007 with a recorded annual income of $122,702,706 which, on top of the reported $769,440,709 he has already earned to date, pushes him to nearly $1billion, largely from endorsements, licensing, books, instructional videos etc.

Trade Mark Law

A trade mark is a sign used in relation to goods or services so as to indicate a connection in the course of trade between the goods or services and some person and/or entity having a right to use the mark. It distinguishes them from the goods or services of other traders (11). Any sign that distinguishes will meet this requirement (AD 2000 Trade Mark (12)).

There is no compulsion to register a trade mark but it can be desirable on account of the legal advantages, a key one of which is to afford the owner of the trade mark (or the assignee, depending on the rights assigned) greater legal protection. This legal protection gives the benefit of not having to go through what can be the quite onerous and difficult procedure of proving the elements of passing off and reputation. a trade mark is fundamentally a badge of origin and as such means that customers can recognise the product and/or services of a particular trader (/club/league). Another key advantage is that where infringement can be proven, financial compensation for losses caused by infringement may take the form of damages or an account of profits. Account of profits is a discretionary remedy and a rightholder cannot enjoy both damages and an account of profits. There are a number of other non-pecuniary remedies that the injured rightholder can also pursue, which are declaratory relief (a declaration of infringement or non infringement), delivery up and destruction (of infringing merchandise etc), a court order to reveal information and an injunction.

Historically, the regime for the registration of trade marks was developed in the nineteenth century and trade mark law is currently formalised in the UK in the Trade Mark Acts 1994 (the "TMA"), which in turn implements the Council Directive 89/104/EEC (the "Directive") which in turn is incorporated into the (Community) Trade Mark (13) Regulation (EC) 40/94 (the "Regulations"). It is important to note that many of the registrability provisions of the TMA are mirrored in the Directive and the Regulations. a significant feature of the Regulations is the creation of a single trade mark right which extends throughout the European Union and gives effect to the Madrid Protocol (14) for the Registration of Marks internationally. as of 1st October 2004, as a consequence of the EC accession to the Madrid Protocol, trade mark owners have benefitted from this International registration system administered by WIPO (15).

The UK has its own trade mark registry, as has the European Community, and as do most developed economies. There are various International treaties (16) which look to link trade marks in one territory to other territories by way of conferring priority in terms of time in relation to subsequent applications for registration in the second territory but it is important to realise that a UK registration will not automatically give rights in any other territory and vice versa.

It is not uncommon for sports persons to register their names, and many have famously done so: "Gazza" being registered by Paul Gascoigne, Zinedine Zidane registering "Zidane", Eric Cantona registering "Cantona 7" and Damon Hill registering the image of his eyes looking out through the visor of his helmet, to mention but a few. However, it should be noted that such applications are not without their difficulties and if not registered early enough, such applications may well fail on the grounds of distinctiveness in that it can be considered that that where goods are connected to a famous image, the personality of the celebrity is considered more important that the indication of origin. Per Laddie J, in the Elvis Presley case, "fame leads away from distinctiveness in the trademark sense" (17). a way to combat such allegations is for the sports person to be involved in the promulgation of the mark he/she has chosen from an early stage (i.e. show a reputation in terms of trading under that mark (18)), ideally when lesser known. It can be seen that this form of protection is of less use to sports stars to restrict third parties from using their images as even where a registration is legitimately granted it will only protect that particular mark in respect of the registered classes and traders are in any event generally legitimately permitted to use famous people's names and/or images in relation to products as it can usually be argued that the public will not be confused into thinking that such use indicated a particular trade source (unless it can be proven otherwise).

In considering the presentation of any trade mark application and its associated definition of class(es) (and indeed any stylized graphic representation of a mascot or sports person's name), the main issue at law, as per Advocate General's opinion in Arsenal Football Club plc-v-Reed (19), is whether "a registered proprietor is entitled to prevent third parties using a mark identical to a registered trade mark in relation to the same goods or services where such use is capable of giving a misleading identification as to the origin, provenance, quality or reputation of the goods or services to which the mark is affixed. The decisive factor is not the feeling that the consumer buying or using the goods harbours towards the registered proprietor of the trade mark but the fact that they are acquired because the goods are associated with the trade mark" (20). It will therefore be necessary to ensure that consumers are not under the illusion that goods (and/or services) to be marketed under any proposed mark could be thought to be associated with any other...