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Sports and Intellectual Property Rights
Intellectual property (IP) rights (patents, industrial designs, trademarks, copyright, etc.) are usually related to the industry, usually the manufacturing industry. IP rights grant exclusivity to the owner of the IP for a limited period of time. But organizers of sporting events are using IP laws to capitalize on interest in particular sports.
Sports activities started as a hobby or a fun event to enable participants to enjoy sports or as a form of physical exercise. Now some games have evolved into giant international events, or rather international businesses with their own “tailored” law. Such international events even challenge the sovereign laws of countries.
Popular games like football, golf, tennis, basketball, cricket, yachting, car racing and so on have evolved into international events with a huge following, creating a huge marketing potential for the organizers. Organizers of popular games such as FIFA (soccer), PGA (golf), NBA (basketball) and so on organize and manage events, usually international competitions, in such a way as to extract maximum value from others who want to exploit marketing . the potential that events offer.
Organizers first create a distinctive logo, emblem or catchphrase to identify the event. If the logos or emblems are original, they will also be protected as copyrighted works.
As an example, the 2010 FIFA World Cup emblem is protected as a trademark and as an artistic work under copyright laws. Terms such as “2010 FIFA World Cup South Africa”, “2010 FIFA World Cup”, “2010 World Cup”, “Soccer World Cup” and similar derivatives thereof are also protected against unauthorized use and subject to the laws in force in various jurisdictions.
Since the logo/emblem/phrases (“event identifiers”) are heavily promoted in mainstream media, they are easily and quickly associated with the event by the public and thus acquire a strong trademark value. Event organizers then go on to leverage the value of the trademark for other businesses.
Let’s look at the different income streams for organizers. The first line of income is sponsorship fees. This includes the right to display the sponsor’s trademark inside the gaming venue/stadium, the right to use event identifiers on sponsor-produced items, or the right to use the event identifier in connection with a service (e.g. .bank, credit card (VISA ), business process outsourcing (Mahindra Satyam)), or placement rights (eg, a certain luxury watch brand next to machine boxes on golf courses).
The second line of income is gate collection. Here too, ticket printing can be sponsored – the ticket bearing the trademark of the sponsoring party.
The third source of income is the exclusive supply of gaming products, such as footballs, tennis balls, rackets (badminton), fuel and lubricants (racing cars), etc. The item supplier has the right to describe itself as the “Official Supplier” to promote their items and to advertise itself as the exclusive provider of such items. Ironically, although Adidas was a high-profile sponsor/partner at the 2010 FIFA World Cup, it was Nike that captured the most viewer attention, whether through the players’ football boots or clever advertising spots. Is this a case of poor sponsorship strategy by Adidas?
The fourth source of income, and increasingly the most profitable source of income, is the exclusive right to record and broadcast the event on television and radio, and possibly on the Internet in the near future. Broadcasting rights are granted to regional and national broadcasting networks. All copyrights related to the recording and broadcasting of the games are retained by the organizers or licensed to specific entities.
Finally, organizers also grant exclusive rights to manufacturers to produce and sell mascot merchandise or products bearing the event identifier in exchange for payment of a copyright fee.
Organizers have a wide stream of income, namely:
1. Sponsorship fees
2. Gate collection
3. Exclusive rights to use the product in case
4. Broadcasting rights
5. Trading rights
In addition to event organizers, other manufacturers and service providers benefit by sponsoring sportswear and game equipment of certain teams or players. Just consider the brand of the player’s shirt, shorts, hat, gloves, shoes, socks, etc. In South Africa, the shoes of a non-sponsor brand worn by the players stood out just as prominently (if not more so) than those of one of the official sponsors. In the case of race car drivers, have you ever seen plain drivers’ tracksuits? Instead, the driver’s kit, including the crash helmet, is often plastered with a variety of trademarks.
Even the soft drinks/beverages consumed by the player during the game are sponsored, reaping the full value of the advertisement. Here the trademark ad is not product ad, like what appears in a TV ad, but the trademark or product is intrinsically associated with a successful player. What other persuasive message could be produced, if not about a world-class player using the advertiser’s product?
In addition to organizers earning income as mentioned above, players, especially major players in games, often endorse sports and even non-sports related products or services or businesses. For example, Tiger Woods not only endorses golf clubs, balls, t-shirts, hats, etc., but also endorses watches, consulting services, and personal hygiene products (Note: He was later suspended / removed from the latter two after his violations); Maria Sharapova, one of the top female tennis players, endorses shoes and clothing, cameras and watches, among others; and footballer Ronaldinho has endorsement deals with Pepsi, Nike and Sony.
To make the most of the revenue streams, organizers of major gaming events like FIFA must strictly enforce their trademark rights and act against those who associate themselves with their trademark without the organizer’s consent. If the organizers do not take strict action against the violators, it is unlikely that they will have high sponsorship rates for future events, not to mention the possible violation of the sponsorship contract.
Unfortunately, IP laws were not designed for such periodic international events. Many manufacturers or service providers would like to be associated with such prominent international events that attract television audiences in the billions, but they either do not have the opportunity or cannot afford the fees and costs. So they try to associate their product/service with the event without the consent of the event organizer. This is where “Ambush Marketing” comes into play. Event organizers are having a field day taking action against such traders. But whether a particular event or ad constitutes ambush marketing is not clear under conventional IP laws. To avoid this, countries, especially host countries, are often required to pass specific laws to deal with ambush marketing before they are given the opportunity to host the event. Britain had to pass the London Olympic and Paralympic Games Act in 2006 before the 2012 London Olympics. “London 2012” trademark is protected.
The next question arises as to how and in what manner the proceeds from the event, say the FIFA World Cup 2010, are spent. Who benefits from the proceeds? That will be the subject of another article for another day.
Note: Trademarks and designs identified in the article belong to their respective owners. The author claims no ownership rights; they are used for educational purposes only.
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