Danny Awdeh
Finnegan, Henderson, Farabow, Garrett & Dunner

Danny Awdeh of Finnegan, Henderson, Farabow, Garrett & Dunner reveals how sports competition organisers and brands are protecting their intellectual property

What effect will Leicester City’s Premier League win have on its protection and enforcement strategy?

Leicester City is no longer only an exceptional sports club, but now also a world-recognised brand name. Through its phenomenal success over a relatively short period of time, it has catapulted itself into rare air enjoyed by an elite universe of well-known, widely recognised brands. This level of recognition takes some companies decades of time and incredible financial investments to achieve―if it can be achieved it at all.

The club’s success, popularity, and compelling story will no doubt attract counterfeiters and infringers. In today’s marketplace, these goods are more likely to be distributed in mass online, though there will no doubt be street vendors hawking knock-off t-shirts and other goods too.

Brand owners that suddenly and unexpectedly find themselves in Leicester City’s position may not have the fully developed IP portfolio in place that mature companies use to protect their rights. As a frontline defence, these brand owners should supplement their trademark, copyright, and domain name filings as needed (particularly in countries known for producing counterfeit products), implement an online watch for counterfeiters/infringers, and record their IP with customs to seize counterfeit products before they hit the market.

Is this a common occurrence?

The explosion of counterfeit goods commonly occurs not only when an unexpected team wins a championship, but when any team, even a favorite, wins a championship.

Fans want to support their favourite team, but there can often be a shortage in team apparel (especially in Leicester City’s case). Fans can be duped into buying counterfeit goods, or they may be indifferent as to whether they have a jersey that is real or fake. This allows an opening for counterfeiters to enter the market.

There are numerous recent examples of counterfeit goods exploding after a successful season, event, or career.

Jeremy Lin exploded almost overnight in 2012 as a basketball superstar in the NBA when he came off the bench for the New York Knicks as a relatively unknown player. His tremendous performances captivated the sports world and sparked the phenomenon dubbed ‘Linsanity’. Lin’s success inspired many fans and ‘entrepreneurs’ to file trademark applications for ‘Linsanity’ and other variations of his name. It also gave way to counterfeit t-shirts and other products, including reports of Lin-branded medical marijuana.

He was able to protect his rights before the US Patent and Trademark Office, which prohibits others from registering someone’s name without permission.

Another good example is baseball team the Kansas City Royals. Since they won the World Series in 2015, counterfeit jerseys have flooded the market. In response, the Better Business Bureau of Kansas City released a statement to the public providing guidelines for avoiding counterfeit goods in an attempt to solve the problem. The bureau recommended:

● Look for grammar issues;
● If it seems too good to be true, it’s probably fake;
● Check where the online business is located and if there’s no address listed, don’t shop from that site; and
● Always make sure there is “https” in the URL when purchasing items online.

How are the leagues and competition organisers reacting to counterfeiting? Are they proactive?

Many leagues implement fairly aggressive measures to prevent the widespread sale of counterfeit products, including through use of government enforcement programmes, seizure operations, court proceedings, and advertising campaigns.

In 2014, the English Premier League began the ‘Football Against Fakes’ programme. It brought Premier League officials, representatives from the teams themselves, sports brands and various enforcement officials from across the UK to share knowledge about counterfeiting and ultimately stimulate the seizure of counterfeit merchandise.

This event has so far occurred twice, once in June of 2014 and again in September 2015. Between the 2014 and 2015 events, a record number of counterfeit goods were seized by the Premier League (more than 500,000 items worth £3.1 million, or $4.5 million), not including seizures made by the teams themselves.

In a similar fashion in the US, through the 2012 ‘Operation Red Zone’, the NFL and US government were able to seize $13.6 million worth of counterfeit NFL merchandise (196,333 items seized). The NFL targeted international shipments as well as domestic flea markets, warehouses, stores, online vendors, and street vendors. Items seized included t-shirts, hats, jackets, and other souvenirs. A similar operation was again launched in 2014 where the NFL collected $19.5 million worth of counterfeit merchandise (326,147 items) in just one year.

The NFL has also implemented a new league policy governing online counterfeit goods this year. According to Chris Halpin, senior vice president of licensing at the NFL, the policy requires online platforms to: (i) list the licensee supplying the goods, and (ii) provide a ‘turnoff switch’ to initiate if counterfeit products are detected.

Litigation has been useful in dealing with counterfeiters in the US. The NBA, MLB and NHL filed a lawsuit on 29 October 2015, signed onto by the Collegiate Licensing Company, seeking an injunction against online companies from selling products featuring their logos, as well as $2 million in damages for each infringed logo.

On 6 November 2015, the court awarded a temporary restraining order preventing the online counterfeiters from selling counterfeit merchandise. The court’s order also required the counterfeiters to identify themselves and any other website used in the production and sale of their counterfeit merchandise.

In another case, NFL v Sunmei (2013), the NFL identified nearly 2,000 interrelated websites selling counterfeit goods, many of which were operating under domain names that included either league or team names, and brought suit against them seeking damages and an injunction. The court awarded the NFL $150 million in statutory damages and an additional $123 million for willful cybersquatting.

Educating consumers has also been an effective way of combating counterfeiting, particularly in industries where the counterfeit goods can cause physical harm. For example, the US Food and Drug Administration warns of the dangers associated with counterfeit drugs in an attempt to prevent consumers from purchasing counterfeit prescription drugs online or in other jurisdictions.

What about ambush marketing?

This issue should be top of mind for all advertisers as we quickly approach the start of the Summer Olympic games. Official sponsors make considerable investments for the spotlight to be on their brands during these events and ‘ambush advertising’ is not well received.

Depending on the jurisdiction, such conduct may run afoul of trademark and false advertising laws, subjecting the advertiser to injunctions and possibly considerable monetary fines. In the case of the Olympics, the International Olympic Committee publishes a fairly extensive list of guidelines, which it actively enforces, aimed at keeping unofficial sponsors a safe distance away from the spotlight that official sponsors pay so dearly to enjoy.

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