Transcript Ch 17 The Legal Aspects of Sport Marketing

The Legal Aspects of
Sport Marketing
Academy of Entertainment & Sports Marketing
The Legal Aspects of Sport Marketing
Three Areas of Intellectual Property
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Copyrights – protect original works of authorship
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Trademarks – protect unique words, names, and symbols
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Patents – protect inventions
Fair Use Doctrine
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Common defense to a copyright infringement claim
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Allows for fair use of copyrighted work “for purposes
such as criticism, comment, new reporting, teaching,
scholarship, or research.”
Copyrights and Sport Events
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Only broadcast or cable transmissions of sport events
can be copyrighted
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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
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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
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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
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A legal contract that grants a licensee the right to
use the trademark of a company (sports
team/league) on its products
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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
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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…
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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
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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
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Conduct a public relations campaign accusing ambushers
of using ambush marketing tactics and that they are not
“official” sponsors of the event
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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
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Inventions of sports equipment
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Applications of technology to sports
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New methods or processes for playing sport (James
Foster’s Arena Football League is patented)
The Internet
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The law of cyberspace is in its infancy
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Numerous lawsuits have commenced nationally to
regulate internet use and its impact on privacy and
property rights
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Few legal precedents have been established
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The law in this area will be established on a case by case
basis eventually establishing legal precedents
Important Laws
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Sherman Antitrust Act - Restraint of trade and
monopolies are illegal; NFL is excluded.
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Clayton Act – Granted rights to organized labor to
confront violations of Sherman Act
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National Labor Relations Act – Granted right to
organized labor to collectively bargain and strike
Recording Industry Association of
America (RIAA)
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Regards file sharing as theft and aggressively prosecutes
violators.
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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
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Groups of employees joining together as a single unit to
negotiate with employees
Contracts
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Agreements enforced by law that detail the transaction of
business
Contracts
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Expressed Contract – contract in which all elements aare
specifically stated and the terms are stated.
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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
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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.
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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.
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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
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Prohibits a person from working in a competing business
for a specific period of time.
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Usually not allowed on sports teams. Found in everyday
business to prevent trade secrets from getting out to
competitors.