Trademarks: LA Gear v LA Chargers

 

In the latest trade mark dispute, to affect the sporting world, roll-up the LA Chargers & LA Gear. The Chargers Football Company LLC are moving from San Diego to Los Angeles and thus re-naming themselves, LA Chargers. Of course, where there is a name change there is also a new trade mark application being submitted. 

The Company registered the trade mark name "LA Chargers" and "Los Angeles Chargers" in January 2017 and also released a fancy new logo (that was also to be compared to the LA Dodgers due to the strikingly similar design). The registration of the trade mark names were to cover pretty much everything that you can stick a brand on and sell to the consumer: clothing, footwear, jewellery, toys, sports equipment etc.

Now when you register a trade mark, there is always a period of time to allow any party to oppose the registration on the basis that it may cause confusion and potentially harm the reputation of another party. Low and behold, on 20 December 2016, footwear brand LA Gear (you may remember them for their light up shoes in the early 1990s) lodged an opposition against the "LA Chargers" mark on the basis that potential customers may become confused as to where the goods originate from and that they are in some way sponsored or endorsed by LA Gear. They claim that the use of 'LA' will cause confusion may easily arise as both brands are offering goods to the same class of consumer.

However, in 2008, Major League Soccer's (MLS) LA Galaxy successfully registered a trade mark for a logo that included that included the words "LA Galaxy." No opposition was lodged by LA Gear. Given that, it is possible that LA Galaxy and LA Gear were able to come to an agreement with each other in relation to the use of the name. However, it may be that this latest move is a tactic by LA Gear to see how far they can push their IP rights.

In relation to trade marks containing geographical words, there is a high bar to achieve in order to have a trade mark successfully registered and protected. LA Gear, however, has obviously met this test given the brands' fame and longevity of use. If LA Gear succeeds in their opposition, they may be able to prevent the LA Chargers from selling merchandise that includes the 'LA' logo and name.[1]

This case is in the early stages and thus the final outcome remains to be seen but there is nothing to stop the LA Chargers and LA Gear, in the meantime, negotiating a settlement agreement that is acceptable to both parties but on the other hand, a court ruling is also not out of the question but a settlement agreement is all the more likely.

What is a trade mark?

Trade marks are known as a 'badge of origin' and can have great economic value to it's holders.

A trade mark is defined as being 'any sign capable of being represented graphically and which is capable of distinguishing the goods or services of one undertaking from those of other undertakings.'

Trade marks can take a number of forms including logos, badges, phrases and distinctive patterns & designs, such as the five golden rings associated with the Olympics.

The registration of a trade mark provides the owner with an enforceable property right regarding improper use. Any infringement of a trade mark allows the owner to claim compensation from the infringer (e.g. the profits earned from the selling of goods) and request an injunction prohibiting them from further use of the trade mark, along with handing over any counterfeit goods.

Brand owners are encouraged to trade mark their logos, designs, catchphrases etc as soon as possible and certainly once popularity begins to take hold and it earns the nature of a distinctive character.

What is the purpose of a trademark?

The purpose of a trade mark is to allow the consumer to associate the origin of a product or service, without any possibility of confusion. Its use provides the consumer with a guarantee of its association. It prevents others from exploiting the reputation and commercial success of the owner by using the trade mark without the owner's consent.

Owners of trade marks are usually provided with two specific forms of protection -

(1) prohibition of un-authorised copies of the owner's trade marks from being produced and marketed on goods and;

(2) attempts to confuse consumers by the use of a design similar to a registered trade mark or by using a registered trade mark on goods similar to those currently being produced by the owner, are prohibited.

What is the paramount consideration when considering applications?

Under Section 10(1) of the Trade Marks Act 1994 and Art 5(1)(a) Directive on the Legal Protection of Trade Marks, a person infringes a registered trademark if he uses in the course of trade, a sign which is identical with the registered mark in relation to goods or services, which are identical with those for which it is registered.

**Any such infringement must actually use the mark, within the UK, and in the course of trade**

Further when determining any possible infringements, the paramount consideration should centre around any possible consumer confusion that may arise, as a result of the mark being used without authorisation. For example, could the consumer mistakenly believe that the goods or services is connected to the mark owner by the display of a registered trade mark or could the goods be associated with another brand, in error, as a result of inclusion of a registered trade mark.

Other sport TM disputes concerning confusion

The Adidas/Barcelona IP Dispute

FC Barcelona have found themselves locked in a trade mark dispute with German sportswear brand, adidas, after the sportswear giant opposed FC Barcelona's trade mark application with the US Patent and Trade Mark Office (USPTO)[2].

Adidas claims the trade mark that FC Barcelona has applied to register, and which consists of a square containing seven vertical stripes (the 1st, 3rd, 5th and 7th stripes from the left are blue and the 2nd, 4th, and 6th are garnet), is very similar to their famous 3 stripe mark (remember the protections afforded to trademark owners, discussed above, can include similar designs).

 

 FC Barcelona registered the trade mark in May 2015. When a trade mark is registered and the application has been considered, notice is then intimated in an official gazette - this allows possible interested parties, such as adidas, the opportunity to pitch up and oppose the trade mark on the basis that their own trade mark is similar and allowing the registration to proceed could cause confusion and in turn, potentially damage the opposing brand's reputation.

In their opposition, Adidas states the following:-

"The Three-Stripe adidas trade mark [Three-Stripe Mark] is well known and famous and has been for many years. It is particularly well known among professional soccer players, fans and consumers of soccer apparel ... Since introducing the Three-Stripe Mark (in 1952), adidas has spent millions of dollars promoting the mark and products bearing the mark.  As a result of adidas's extensive use and promotion of the Three-Stripe Mark, adidas has built up and now owns extremely valuable goodwill that is symbolised by the mark. The purchasing public has come to associate the Three-Stripe Mark with adidas."

FC Barcelona's seven-stripe mark is registered for use on a wide range of goods and services including flags, placards, clothing, stationery, footwear, headwear and sporting equipment. Adidas alleges that the trade mark is strikingly similar to their 'Three-Strip Mark' both in appearance and commercial impression. Given that, they consider that FC Barcelona's mark is:

 "likely to cause confusion, deception, or mistake as to the affiliation, connection, or association of FC Barcelona with adidas, or the origin, sponsorship, or approval of [its] goods by adidas ... Consumers familiar with the footwear and apparel long associated with adidas' Three Stripe Mark are likely to assume that the goods in Class 25 (footwear and apparel) and Class 28 (sporting goods/equipment) offered under FC Barcelona's trademark originate from the same source, or that they are affiliated, connected, or associated with adidas ... any defect, objection, or fault found with FC Barcelona's products marketed under the FC Barcelona trademark necessarily would reflect on an seriously injure adidas's reputation."

As such, Adidas have asked the USPTO to reject FC Barcelona's application to register the seven-stripe trade mark, citing its similarities to it's own already established mark. However, this is not the first time that adidas has taken on a heavyweight brand, in relation to trade mark infringements. It has previously won cases against Marc Jacobs (4 stripes mark), Forever 21 (3-stripes), Sears Department Stores and Skechers (for selling similar designed footwear). 

What is interesting about the Barcelona case, is that the kit partnership that Barcelona has is with Nike, arguably adidas' biggest competitor - especially when fighting it out for deals in the global football market. For example, Nike has just recently concluded a record-breaking kit deal with Chelsea FC - the previous Chelsea kit deal was with adidas ... You do the maths!

This case is ongoing and has yet to be concluded but it will be interesting to see what the USPTO decides.

Milwaukee Bucks & Golden Knights

Image source: http://en.francais-express.com

In 2015, NBA team Milwaukee Bucks submitted a trade mark application, for their new logo, to be registered for use over a wide range of goods and services including education and entertainment services. At the time of registration, the initial examiner at the USPTO did not find any similar marks and therefore the registration was allowed. The mark was thus published and the usual 30 day period commenced for any parties to pitch up and lodge an opposition on the basis that they could suffer commercial harm.

The German alcohol company, Jagermeister, lodged an opposition, in December 2016, arguing that there is a likelihood of confusion between the two logos, a false suggestion of connection and a dilution of the Jagermeister logo's "distinctive quality." Jagermeister claims that the services provided by themselves and the Bucks are "so related" that it creates the potential for confusion. The notice stated that the potential for confusion and harm to the company "is enhanced by the extraordinary fame of Jagermeister's trade marks."[3]

"In other words, if the Bucks have a bad season, this could cause Jager fans to switch to vodka or tequila shots to not be reminded by the Jager bottle of the Bucks missed free throws or turnovers." (Katrina Hull of Michael Best & Friedrich) [4]

However, it is understood that the lodging of the opposition is purely a formality to protect Jagermeister's IP rights. A representative of Jagermeister confirmed that both companies had been liaising with each other for months and they expected to be able to come to an agreement with the Bucks, going forward.

Image source: KTNV

In late 2016, the US Patent & Trademark Office refused a trade mark application by the NHL franchise, the Vegas Golden Knights, who tried to register 'LAS VEGAS GOLDEN KNIGHTS' and 'VEGAS GOLDEN KNIGHTS'. The USPTO refused the mark on the basis that it could cause potential confusion with the team name for the College of Saint Rose, who are also called the Golden Knights. 

The NHL have until 07 June 2017 to formally respond citing reasons as to why the name should be registered and co-exist with the College of Saint Rose.

Law in Sport has recently published a very interesting article discussing the Milwaukee Bucks/Golden Knights cases and is well worth a read for some further insight.

Nike

Source: http://fardamento.netshoes.net/BR/LNetshoes/production/20160617/SPONSOR/20160617SPONSOR0829223.png

As you are most likely aware, Nike International produces sports goods which it sells under the registered trade mark, 'Nike'. This trade mark is registered in Switzerland. In 1985, Nike International was contacted by a Spanish company called, Campomar, (who has 'Nike' registered in Spain, as a trade mark, since 1984) who notified Nike International of its intention to produce a sporting perfume line under the name 'Nike', the sale of which would be handled by Quarz AG. Campomar asked if Nike International would be interested in partnering on the project but Nike declined.

In 1993, Quarz began the launch of 'Nike Sport Fragrance' cosmetics line in Switzerland and contacted Nike again about co-operation. Nike ruled out any co-operation and stated that it would not tolerate the use of it's trade mark, 'Nike'. 

An injunction was sought under Article 15 of the Trademark Act 1993 (Switzerland). Under this provision, extra protections are afforded to 'famous trademarks' whereby the owner of a 'famous trade mark' can prevent its use by others not only with respect to specific classes of goods but also for every kind of goods or services, if such a use endangers the distinctiveness of the trademark or exploits or impairs its reputation. 

The Court held that the majority of persons pursuing sports are aware of Nike International's trade mark. It is one of the most demanded brands and one of the three most famous sport brands, globally. It enjoys excellent market reputation and it's advertising effect (which did not become famous by itself) does not only relate to sporting goods but other goods too. Although Campomar also holds the rights to the trademark 'Nike' that has existed for decades, in Spain, this is not likely to be known to the public in Switzerland. The Court also noted that Campomar was not disputing the fame that Nike International's trade mark enjoyed. 

The Court concluded that it was obvious that Campomar would profit from the reputation of Nike International's trade mark when selling the perfume aimed at sporting individuals. The idea of 'sport' could easily be transferred to a perfume line whose marketing also underlined the character of sporting activity. Given that, if Campomar were allowed to use the trade mark, they would benefit from Nike International's advertising success and that is exactly what Article 15 aims to prevent.

Other ongoing trademark disputes (not related to confusion)

Washington Redskins

Image source: Rolling Stone

In 2014, the Trademark Trial & Appeal Board (TTAB) of the USPTO revoked a number of the Washington Redskins' trade marks (that had been in use since 1967) on the basis that they were disparaging to Native Americans. This included the famous logo of a Native American face.[5]

In determining that decision, the Board focused on two questions: (1) Were the Redskins' trade marks used in reference to Native Americans and (2) did such usage disparage Native Americans. The Board concluded that the answer to both of those questions was yes and the trademarks were thus cancelled.

The ruling did not mean that the Redskins could no longer use the marks, it just meant that they were no longer protected and therefore they could no longer stop others from using the logos and names and potentially cashing in, without permission.

However, there may just be a light at the end of the tunnel for the Redskins because this week, the United States Supreme Court is considering a similar trade mark case where there is a dispute over an offensive mark. The current case concerns an Asian-American rock band called 'The Slants' who were refused the trade mark registration of the band's name because examiners at USPTO considered that the name disparages Asians.

The band's founder alleges that the 70 year old law called The Lanham Act violates free speech rights. The particular provision of the Act concerning disparaging trade marks states the following:

"No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—

Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute."[6]

The band won that argument during the Federal Appeals hearing, with the Court ruling that the above disparaging mark rule was unconstitutional. However, the US Government is now appealing that decision with the hearing being heard this week, in Washington D.C.

The case will have broader implications no matter what way it is decided but if the Court finds in favour of The Slants, the Redskins just may get their trademarks back.

Conclusion

As you can see, due to the increased commercialisation of sport, IP rights remain an important and contentious issue. Trade mark infringements are not the easiest to pursue and copyright breaches may be easier to take action, if done so without permission (but that is for another post). However, holders of IP should be aware of their rights of enforcement whilst third parties who take the decision to use club emblems & other marks should obtain permission first of all and avoid any use until such permission has been given, to avoid any legal arguments, at a later date.

IMPORTANT: This post is not intended to be a legal briefing, it is not intended to be a statement of the law and no action should be taken in reliance on it without specific legal advice.