Cover Letter

• Title of the Paper: Role of Trademarks in Sports Business and Marketing

• Sub Theme: Trademarks and Sports Business

• Name of the Author(s): Robin Vincent (Author), Toshbant Raj(Co-Author)

• Name of the Institute: Central University of South Bihar, Gaya

• Course: B.A.LL.B (Hons.)

• E-mail Address: robin.vincent1995@gmail.com, robin@cusb.ac.in,

toshbantraj62@gmail.com.
• Postal Address: SH-7, Gaya-Panchanpur 824236 (Bihar)Road, Village – Karhara,
Post.- Fatehpur, Gaya.
• Contact Number: 9835825578;9534607443
 Role of Trademarks in Sports Business and Marketing

Abstract
Trademarks play a significant role in sports business and marketing. Brands are critical for
creating business value, and the sports business is no exception. Strong brands command
customer loyalty and premium prices. They are the valuable assets that drive the company
revenue and growth. In the field of sports, it is done through sponsorship deals and product
merchandising. And at the heart of branding lie trademarks. The display of trademarks at
sporting events of cricket, football etc. through various means such as on the sports ground,
equipment, t-shirt, cap, football and so on, appeal to the aspiration and emotions of the fans
of the respective sports who are drawn to signs associated with a given club or sport. So
sponsorship of such sporting events can link a company or product to the prestige, youth and
dynamism of that event. They help the company to build a reputation in the market by
instilling consumer confidence and trust in the goods and services it provides. The goodwill
associated with a successful trademark or brand can be a huge commercial asset. And on the
other hand, through sponsorship, the sports events also get benefitted by the financial
support by which such events can be organised with all the appropriate facilities. Also,
Sporting celebrities also register themselves as trademarks which also further help the
companies to generate huge income and reputation in the market. And most importantly
Intellectual property law enables sports personalities, as well as teams, sports organizations
and sports good manufacturers, to protect themselves against abusive and unauthorized use
of their registered trademarks. So, in the modern arena of booming sporting business, IP Law
has a great role to play by providing IP protection and management.

Trademark as an Intellectual Property

“Every Trade Mark you build adds to the financial value of your business, much more than
your tangible assets” ― Kalyan C. Kankanala

Trademarks (popularly known as brand name) in layman’s language is any distinctive symbol
words, letters, numerals, drawings, pictures, shapes, colours, logotypes, labels or
combinations 1which are used to distinguish it from other similar goods or services originating
from a different undertaking. In today’s world trademarks plays a vital role in deciding the
1
Section 2(1) (zb) of the Trade Marks Act, 1999.
behaviour of individual consumers as every product in the market faces competition from
products that are often almost identical, similar or good substitutes. Meeting or exceeding
customers’ expectations in today’s era is one of the challenging tasks, especially when tastes
and preferences continuously evolve in a competitive marketplace, with many similar
products catering for the same need. Only businesses that can meet these challenges can
expect to develop and retain a loyal clientele.
The development of trademarks can be traced back to the onset of the industrial revolution,
which facilitated the large scale production and distribution of goods. With the growth of
globalization and e-commerce consumers started identifying their products with that of
certain marks and symbols so as to distinguish these products from other similar products in
the market. Over a prolonged period of usage, the products with particular marks started
gaining popularity as well as recognition among consumers of goods.

With the rise of competition, the proprietors of those marks realized the need for uniform
legislation to grant registered proprietor an exclusive right to use the trademark as prescribed
under the law relating to trademarks. Therefore the most important functions of a trademark
were realized to be identification, source, quality and advertising. 2Trademark is the symbol
of origin and source of a mark and bears the stamp of quality. The maker of a trademark
would always want to protect his mark from unfair usage and also from fraud and deceit.

Trademarks in Sports Business and Marketing

When we talk about trademark and sports the very first thing that clichés one’s mind is that
how sports is related to intellectual property rights and trademarks. We all consider Sports as
a means of entertainment and just career and passion of a few people, but in the modern day,
sports are looked as a huge business opportunity 3 for everyone.

From the recent past year's commercialization 4 of sports has become an enormous business
market. Marketing through franchising 5 as well as the brand building of sports, sportsmen,
and events have gained gigantic importance. Sports, for a very long time, was just considered
to be a recreational activity. However, it has now become one of the major sources of
entertainment and a big market for business. A major share portion of revenue in most of

2
JT McCarthy, Trademarks and Unfair Competition, Vol. 1, Publisher, New York, 1973, Pg. 86.
3
Kalmandi: IP and Business of Sports Management (JIPR) Vol. 17, Sep. 2012; Pg. 438.
4
Kalmandi, Supra note 3 at 437.
5
Research Gate Law Journal on Sport in Asia Globalization also available at
https://www.researchgate.net/publication/221914282_Sport_in_Asia_Globalization_Glocalization_Asianization.
(Last Visited 13 April, 2019)
these sport business flows through various activities such as branding, merchandising, and
licensing, etc.

Sport trademarks are valuable assets that can build confidence, trust, and loyalty to a product
which also let customers recognize the products of a particular business. These branding can
also increase prices, customer loyalty, revenue, and growth and are central to many business
transactions, sponsorship deals and product merchandising 6. Talking about some of the
popular games such as cricket, football, tennis, car racing, and so on have evolved into an
international sporting business and trading with a huge following, making way for colossal
marketing potential for organizers.

Innovation and creativity are the key drivers in the world of sports. In every sporting field,
inventors and creators are working behind the scenes to push the boundaries, creating new
opportunities for their better performance. Sports shows Intellectual Property 7 in action.
Trademarks, brands and designs contribute to the distinct identity of events, teams and their
gear. When we look into all these creative elements and opportunity which are put together
into commercialization of this huge business, 8 then their protection becomes an essential
question placed in front all.

Mutual Benefits of Trademarks

Registering trademarks provides protection for both businesses and consumers, making them
an important part for running a successful company. Businesses which are responsible for any
products or services bearing their trademark, tend to bring them more pride in their products
to maintain a good reputation, as precisely trademarked companies 9 will often work harder to
provide quality services and products. But when we talk about trademark in sports business
then there is an interlinked mutual benefit 10 to both the Sports and Sports business.

6
UP Counsel, “Sport Trademarks: Everything You Need to Know”, available at:
https://www.upcounsel.com/sport-trademarks ( Last Visited 13 April, 2019)
7
WIPO: Sports and Intellectual Property. Available at: https://www.wipo.int/ip-sport/en/(Last Visited 13 April,
2019)
8
T. Amabile and M. Khaire, “Creativity and Role of the Leader”, Harvard Business Review.(2008)
9
MARCARIA Article: The Importance of Trademarks in Business also available at
https://www.marcaria.com/ws/en/articles/the-importance-of-trademarks-in-business.(Last Visited 13 April,
2019)
10
FORBES Article on The Revolution of Sports Sponsorship by Jason Belzer; 22 April 2013 and available at
https://www.forbes.com/sites/jasonbelzer/2013/04/22/the-revolution-of-sport-sponsorship/#10a564776c90.(Last
visited 13 April, 2019)
Firstly talking more precisely about the benefits of trademark in a sports business than a
sporting event the prominent display of trademarks at prestigious sporting events increases
sales of the company as by appealing to the aspirations and emotions of sports fans, who are
drawn to signs, symbols, logos, devices etc. associated with a sports company and these
trademarks also become symbol of a specific lifestyle or behaviour for the consumers.
Professional athletes or sports stars have an undeniable indirect or direct influence on the
purchasing decisions of their fans. The supporters of a team will most precisely to prefer buy
tickets, jerseys, T-shirts and other memorabilia and clothing featuring their favourite players.
This influence can also spread to products outside the team structure, such as food, cars
clothes and many more. The fan wants to adopt the aspects of the strong, fast, athletic player,
and become an excellent target market for an advertiser that uses such a player to endorse a
product.

In the sporting business, sports superstars have a great influence over their followers in
deciding their purchasing choices and decisions as well. The prominent view of faces or signs
of sports superstar as a means of advertisement and promotion of these sports business has a
direct and great eye-catching impact on these sports brands 11. It clearly means that for
promoting and advertising sports products, these promotional activities is directed to a
specific audience following a particular sport and particular sports star.

Prominent sports figures are attractive endorsers for a sports business looking to increase
their brand awareness and boost in sales of their products. An athlete makes credible voices
to pitch the products designed to improve athletic performances, and their celebrity status
means some fans will look to emulate them by buying what they endorse in the market.

Further talking about the benefit of sports to these sports businesses then the first thing that
comes out is sponsorship of any prestigious sports event, by such a sports businesses is that it
certainly links a sports company or product to the prestige, 12 youth and dynamism of that
event.

On the reciprocal basis, sponsorship of any sporting event by these sports businesses and
their support maintain the financial health of many sports organizations, clubs and even
individual athletes somehow depend on this sponsorship revenue. The more successful a
team, the more valuable its brand, and the higher the income and spending power of the

11
Sports Marketing and the Psychology of Marketing Communication by Lynn R. Kahle, & Chris Riley
published by L. Erlbaum Associates, (2004) Pg. 219.
12
Brand watch blog on How Sports Sponsorship Benefits Brands( Published on May 2nd 2013).
sports organization involved. Thus these sports business become an integral part to enhance
the value of, any sports, games, and other events as mainly because the revenue that the
sponsors generate from the business and advertisements has a direct impact on the clubs,
teams and sporting events as they can now afford better facilities and more skilful players
which also maintains the spirit of any sporting event as well as it also creates a better
foundation for infrastructure 13 of the upcoming generation players as well.

Athletes, teams, and sports associations enjoy direct revenue from endorsement deals. Being
the face of a brand makes them more accessible to people who even do not follow sports.
This can lead to said people who begin to follow sports for the sake of this athlete or team, in
turn, increase revenue from ticket sales and the like for the athlete or team. Sports marketing
raising interest in a sport, in general benefits, everybody associated with that sports. They
also benefit from the media rights that come with promoting sports. Sports sponsorship is
seen as one of the pillars of sports marketing.

When we try to look at the ambit of a sport in a broader sense then it is certainly found that
the promotion of healthy sports and its business leads to the healthy growth of a nation’s
economy as well. 14 In a very short span of time sports business has become the second largest
business all-round the globe which has also become an accountable source for generation of
employment in society as well as the expansion and the rise of nation’s annual income as
well.

Trademark creates Brand Value

A trademark helps to inspire confidence among consumers that the product or image
associated with the sporting event is authentic, and that any advertising or promotion that
makes reference to the event or to associated images is legitimate 15 in addition the value of
any sporting equipment’s promoted by these sports businesses are immediate and palpable.
When a sports business show any of the new brands which are not known to any individual
consumer but it can also be able to uphold a big share of his market, simply because of the
power of the business name having trademark which is backing it up.

Endorsement by any of the trademarked sports businesses has the power to instigate, inspire,
enrage, entertain and edify the consumer. So sometimes even an expensive sports brand may
13
International Institute for Analytics Research paper on Analytics in Sports: The New Science of Winning by
Thomas H. Davenport (Published on Feb. 2014).
14
UN Inter-Agency task force research on Sport as a tool for Development and Peace.
15
Satyam Infoway ltd. v. Sifynet Solutions Pvt. ltd., 2004 (6) SCC 145.
appeal to the individual consumer and sports fan to go with it. It seems obvious, but in order
for their impact to be shown, a trademark has a similar target towards the audience, that the
"influencer" has to begin with. Using trademark by these sports businesses to promote
something that their audience has an interest in will produce a big marketing splash.

Recent studies of hundreds of trademarks endorsed by these sports companies have indicated
that sales for some brands increased up to 20% upon commencing an endorsement deal.
According to Anita Elberse 16, associate professor at Harvard Business School, some
companies have seen their stock increase by 25% only because of one reason that the face of
the popular trademarks has now become the face of that sports business from the date of
signing the documents of registering a trademark.

Trademark Protection to Sports Clubs and Team Organizations

Commercialization of sports is growing so excessively that the competition amongst sports

clubs or associations is not only on the event field but also in the business for making huge
profits. Merchandising has become one of the most revenue generating and sophisticated
businesses for sports clubs and teams. On the formation of the sports team or club, the teams
are generally recognized by a team name. For the purposes of identification, logos and fancy
taglines are created. Today every sports club or team comes up with its own merchandise
which is very innovative and attractive. The most common and popular variety of
merchandising range from caps, t-shirts, mugs, shoes, toys, bobble heads etc 17. Off the field,
on the commercial level, sportsmen get into endorsements and advertisements. Once all these
creative elements are put into commercialization, their protection becomes essential. For
instance, today intangible assets such as team names like Royal Challengers, Manchester
United, events such as Olympics, US Open etc., along with their colourful logos, emblems,
taglines, hold high commercial value and are significant components of branding and
merchandising activities and hence their legal protection is necessitated to prevent third-party
infringements 18. Most sports clubs have ventured into the exploitation of their intellectual
property and are into different business such as merchandising, computer games, café’s, and
so on. The adventure of competition among sports businesses of earning profits by exploiting
other trademarks and other rights makes it essential for them to be adequately protected under

16
Research Journal Harvard Business School on The Economic Value of Celebrity Endorsements (Published on
June 2012).
17
Kalmandi, Supra note 3 at 440.
18
Kalmandi, Supra note 3 at 438.
Intellectual Property Rights. The protection of the various species of IP would be in various
forms like registrations, agreements with proper terms and conditions etc 19. Lately,
merchandising is one of the most lucrative businesses where sports clubs have a larger stake.
Hence, while investing in merchandising business, it is advisable for owners to not only have
business knowledge but also understand the legal intricacies surrounding that are available to
get protected. In merchandising, there are a lot of minute but highly important issues such as
ownership of the trademark, sharing of revenues, confidentiality etc. With the various
personality rights violations happening all around the globe, celebrities today are very keen
and cautious about protecting their image and personality rights. Thus the stakeholders need
to be alert that they do not end up violating the personality rights of any sportsman. It is
always preferred to take a good legal opinion on what can be used and what cannot be, before
entering into the business 20.

The trademark stock of a sports business is bound to grow with the expansion of its
organisation operations and the value of such stockpile grows with the popularity and success
of the team and players as well. Since most existing business models on commercialization of
sports are largely based on IP wealth of sports clubs, it is important to nurture such
intellectual properties through activities such as regular trademark audits and valuation,
adequate protection and maintenance of company’s trademarks portfolio. These investments,
when made with right strategies, are bound to return in multi-beneficial folds 21.

Legal protection of Sports Trademarks

Protecting trademarks assumes high importance to safeguard commercial interests. As

merchandising by the sports businesses has become an intangible and valuable asset, the
goodwill and reputation earned by them need to be legally protected, as otherwise, wrongful
exploitation will pave way for misappropriation of their hard earned reputation. This was also
categorically made clear by the courts in the Arvee case. 22 Though it is the trademark that
drives for the success of the product in the market, the popularity of the sports businesses in
its branding simultaneously plays a pivotal role.

The proprietors of sports clubs, team organizations, sports personalities and sports companies
can protect their trademark by registering them under the Trademark Act, 1999. Under the

19
Kalmandi, Supra note 3 at 442.
20
Ibid.
21
Ibid.
22
ICC Development (International) v. Arvee Enterprises &Anr., (2003) VII AD Delhi 405.
Act, a proprietor can apply for registration for various classes of goods and services in
relation to which the trademarks are being used. For example, Mumbai Indians, apart from
being a Cricket team, also sells merchandise in the form of caps, t-shirts etc. T-shirt, which
falls under the category of clothing, can be registered under class 25 (in India, as per
classification of goods in India) and mugs can be registered in class 21 under porcelain and
glassware. Thus it is important to recognize the appropriate class and register the trademark.
The team jerseys can also be protected as trade dress 23. Registration of a trademark is a
simple process which can be done with the help of a registered trademark agent or a lawyer
by paying prescribed statutory fees. Under Trademarks Act, 1999 an infringement suit would
lie only if the trademark is registered. So, any unlawful or unauthorised use of the trademark
of the sports business or sports clubs etc. on commercial sale or advertisements of goods or
services would fall within the purview of a trademark infringement action, and then the
trademarked company has a good chance of success in that case. But if the trademark is
unregistered, then these sports businesses can sue for a passing off action under the common
law rights. But however, protection of these unregistered trademarks of the sports businesses
does not find a place under the existing Trademarks Act, 1999. Protection to the trademarks
can also be sought internationally by making an application under the Madrid system which
allows the applicant to apply for trademark registration under multiple jurisdictions.

In cases of trademark infringement, both civil and criminal remedies are available under the
Indian Trademarks Act, 1999. For registered trademarks, the Trademarks Act provides for
statutory remedies. In case, the Trademark is not registered, the remedy of passing off is
available under the common law 24. The trademark owner who is seeking a remedy under
passing off has to prove three basic requirements 25. Firstly, the owner has to show that his
trademark has acquired goodwill in the market place, secondly, there was a misrepresentation
and thirdly there was damage caused to him due to this misrepresentation.

Another remedy that is available for the trade mark proprietor is under the anti-dilution law.
This remedy of anti-dilution is applicable only for well-known marks. Few trademarks
become very famous amongst the public and such marks are known as well-known marks or
famous marks. These well-known marks are given high importance under the trademark law
because of their strong association in the minds of consumers. These marks have special

23
Kalmandi, Supra note 3 at 438.
24
Kalmandi, Supra note 3 at 439.
25
These three basic requirements are popularly known as classical trinity and was first enunciated in the House
of Lords decision of Reckitt & Colman Products Ltd. v. Borden Inc. (1990) 1 WLR 491.
protection under anti-dilution law i.e. well-known marks have the right to prevent dilution of
their marks used by another product or services. For example, Manchester United is one of
the well-known marks and they come up with a lot of merchandising articles such as key
chains, T-shirts etc. If someone sells adult toys under the Trademark Manchester United, that
would amount to dilution of the Trademark Manchester United 26.

Conclusion

Sports which for a very long time, was considered to be a recreational activity, has today
become a thorough commercial activity generating elephantic profits. A major portion of this
revenue flows from various activities such as branding, merchandising, sponsorship,
licensing etc. which involve exploitation of the various intellectual property rights.
Trademarks as an intellectual property play a significant role in sports business and
marketing. Brands are critical for creating business value, and the sports business is no
exception. In the field of Sports business and marketing there are various stakeholders which
include the sports companies, sporting events, sports personalities and newly formed entities
in recent years are various sports clubs and team organizations. The ways in which revenue is
generated in sports business through the exploitation of trademark is mainly through
sponsorship, merchandising and licensing.

The relationship between the stakeholders can be analysed from various angles. Firstly, there
is a relationship of mutual benefit between sports companies and sporting events. As, the
sports companies through the display at the prestigious sporting events and advertising the
sports events through their merchandise appeal to the aspirations and emotions of sports fans,
who are drawn to signs, symbols, logos, devices etc. associated with a sports company. It
inspires confidence among consumers about the product or image associated with the
sporting event that it is authentic and that any advertising or promotion that makes reference
to the event or to associated images is legitimate. As a result revenue of the sports companies
increases by the sale of its brand products and merchandises. There is a mutual benefit to the
sporting events as sponsorship of any sporting event by these sports businesses maintain the
financial health of many sports organizations, clubs and even individual athletes who
somehow depend on this sponsorship revenue. As the sporting events could be now organised
with better facilities and equipment by the revenue generated through the sponsors. So there
exists an interdependent relationship.

26
Kalmandi, Supra note 24.
Also, sporting celebrities also register themselves as trademarks which also further help the
companies to generate huge income and reputation in the market. In the sporting business,
sports superstars have a great influence over their followers in deciding their purchasing
choices and decisions as well. And in recent years, the major area where sports business is
concentrated is the rapid development of sports clubs and team organizations. Most sports
clubs and teams have ventured into the exploitation of their intellectual property i.e., team
name, tagline, logo, etc. and are into different business such as merchandising, computer
games, café’s, and so on. The adventure of competition among sports businesses of earning
profits by exploiting other trademarks and other rights makes it essential for them to be
adequately protected under Intellectual Property Rights.

The proprietors of sports clubs, team organizations, sports personalities and sports
companies are protected against infringement their registered trademark under the Trademark
Act, 1999. Also if the trademark is unregistered, then these sports businesses can sue for a
passing off action under the common law rights. Protection to the trademarks can also be
sought internationally by making an application under the Madrid system which allows the
applicant to apply for trademark registration under multiple jurisdictions. Since most existing
business models on commercialization of sports are largely based on IP wealth of sports clubs
and teams, it is important to nurture such intellectual properties through activities such as
regular trademark audits and valuation, adequate protection and maintenance of company’s
trademarks portfolio. These investments, when made with right strategies, are bound to return
in multi-beneficial folds. This can be ensured through established institutions for managing
the IP of the Sports clubs and Team Organizations. As in recent years, new sports events are
also being brought into the market, so the need for such IP management institutions becomes
more significant.