Trademarks are the foundation of branding, as they protect the rights holder from third parties using any protected words or logos for their own pecuniary gain. Fnatic, Fatal1ty, and Overwatch League, are a few of the many examples of trademarks utilized in the esports and streaming industries. Trademarks are extremely valuable assets to those who own them because they provide heightened protections and rights to owners. These benefits are not only available to companies, like when a streamer or influencer creates a company to provide their services through, but also to individuals who can prove that their name, or pseudonym, has acquired “secondary meaning”. Secondary Meaning is a legal term used to mean that the mark owner can show that the individual’s name or pseudonym is indicative of the producer of the services and not the services themselves. Popularity certainly plays a role in whether Secondary Meaning can be proven. Athletes like LeBron James and Cristiano Ronaldo have trademarked their names, nicknames and even their commonly-used phrases to provide themselves with exclusive use of these words and phrases for their own pecuniary gain. Streamers and influencers should follow in these athletes’ footsteps with respect to their intellectual property.
What are trademarks?
Trademarks are words, symbols, or phrases, used to identify and distinguish the specific source of goods or services. A trademark provides its registrant with the exclusive right to use a registered word, symbol, or phrase in connection with the goods or services specified in its registration. This means that the use of confusingly similar words, symbols or phrases in the same or similar industries could be unlawful. Trademark registration provides owners with a number of other benefits as well.
Once a trademark is federally registered, the registration serves as notice to the rest of the United States that the word, mark or phrase is being utilized in commerce by the mark’s owner. This means that if someone tries to utilize that mark, or a confusingly similar mark, for the same service or product, even if they were unaware of the registered mark, the prior registration precludes that mark from being utilized in commerce.
The federal registration also allows the mark holders to use the ® symbol. This symbol appears after the registered mark, in the upper right hand corner, when the mark is being used in connection with the goods and services listed in its registration. It gives constructive notice to potential infringers that the mark has been registered with the United State Patent and Trademark Office (“USPTO”) and that the mark holder has the exclusive right to use and license the trademark.
Oftentimes, the registration and use of the ® symbol alone will prevent users from creating marks that are confusingly similar. However, if a third party infringer utilized a mark that is confusingly similar, a mark owner can demonstrate their ownership by directing any infringers to their registered trademark, which is publicly viewable on the internet. Federal registration also allows a mark owner to obtain statutory damages up to $200,000 (in counterfeit cases), treble damages (for willful infringement), and attorneys fees, should the mark owner need to pursue any infringement of its trademarks through litigation. For these reasons, trademarks can act as both a sword and a shield for the registrant.
Why Trademarks are Important for Streamers
A trademarked alias will provide you with complete control over the use of your name in connection with the goods and services in which your trademark is registered. For instance, if your alias is “CKNdinner”, and you file a trademark registration for that phrase in connection with Class 25 (clothing, footwear, headgear, etc.), you will be the only person or business that is able to sell t-shirts, hats, etc. with that name on it once the mark is registered. These goods will also show the ® symbol after the mark, which will help deter potential infringers before they even think about utilizing the registered mark, or a confusingly similar one, on their own goods. Further, if someone were to infringe on their registered marks, they would have a strengthened position to pursue a claim through court due to the potentially increased damages and ability to be awarded attorney’s fees.
Without the trademark on your alias, it is much more difficult to protect against a third party trying to profit off of your established brand. It sounds uncommon, but this happens more frequently than you may think. A few years ago, professional athlete Johnny Manziel was forced to take legal action against a man who sold t-shirts using his popular moniker, "Johnny Football". Although Manziel did not have formal trademark protection for the nickname, he still had common law rights to use the phrase and the opportunity to plead his case in court. Plaintiffs in these types of actions may still be successful without a registered trademark, but in order to receive a monetary award, they would have to demonstrate actual damages, which can be in difficult in many cases. Nonetheless, the federally registered trademark would grant streamers and influencers the right to sue in federal court, and due to the statutes which govern trademarks, the bar to recover monetary damages would be much lower.
As online streaming viewership continues to grow, individual brands are becoming increasingly more valuable by the week. Subscribers and companies alike are willing to pay a great deal of money to streamers and influencers in the hopes reaching their audience and showcasing its brand. In order to make sure that their brand is adequately protected, streamers and influencers should consider the benefits a trademark can provide to them. In addition to the benefits described in this blog post, trademark registration in the US may also serve as the basis for a foreign trademark registration, which is especially helpful given the increasingly global esports and streaming industries. Sophisticated streamers and influencers should follow in the footsteps of the entertainers before them, and their massive brands, in order to shield themselves from any potential infringers while they grow their brand.
If you are a streamer or influencer and you would like to discuss how our attorneys can help you with this process, please contact us.
Its Super Bowl week, and the Seattle Seahawks are back to defend their title against the New England Patriots. However, the Seahawks have made the news for some of their off-field business endeavors this week. The Seattle Times has reported that the Seahawks have filed applications for multiple trademarks since their Super Bowl victory last year. One of these applications is for "12".
The Seahawks refer to their fans and their stadium as the 12th man, largely due to the noise of the crowd not allowing opposing teams from hearing each other on the field. The team has previously attempted to trademark "12" twice, to no avail. Their applications for "12" were previously denied due to a conflict with a NASCAR team trademark and a hotel's trademark. Currently, the Seahawks are attempting to trademark "12" in the font that appears on their jerseys.
But what is a trademark? A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from another.
Effectively, the Seahawks application for "12" in their jersey's font is asserting that it identifies and distinguishes its source as the Seahawks. However, this mark is likely not distinctive enough for trademark registration. Instead, this mark would likely be found as generic. The block letter jersey font, as shown in the picture above, is strikingly similar to many other football teams' fonts, at every amateur and professional level. Because a trademark must identify and distinguish its source, and the term "12" is not distinctive enough on its own, the font's similarity to other team fonts weakens the strength of the mark.
Generic marks can be trademarked if the mark has acquired secondary meaning. That would mean that despite its prima facie generic qualities, that consumers have come to associate the mark with the source of the goods. Although there may be an argument that Seahawks fans may associate articles bearing "12" as having originated from the Seahawks, that argument seems somewhat tenuous. The strong generic nature of the mark may be difficult to overcome and achieve secondary meaning.
Although it should be encouraged for sports teams and athletes to pursue trademark opportunities to protect their brands, the Seahawks attempt to trademark "12" appears to be an overreach.
Franchises are everywhere. McDonald's, one of the most visible franchises in the US, has over 34,000 stores worldwide. Take a look at this extremely interesting spreadsheet on the number of McDonald's franchises by country over a five year period. Needless to say, McDonald's is a strong brand that isn't going anywhere anytime soon.
But how do businesses become franchises? Franchises are governed by Federal and State law, and the mix of the two have created the following best practices:
Determine if franchising is best for your business
The two primary options for a business to expand out of its area are to franchise or open branches. A branch is wholly owned and controlled by the business itself, and all of its profits flow to the business. However, opening and operating a branch are entirely at the expense of the business. Due to the expenses involved, branches are more suited for slow, calculated growth.
On the other hand, franchising can allow a business to grow quickly, as the expenses to open and operate a franchise are paid by the franchisee, or the person buying the franchise. The business will condition the operation of the franchise upon numerous terms to maintain uniformity as much as possible, and will receive royalties for use of the brand (usually in the form of a percentage of the franchise's profits). However, franchising requires a strong brand identity that potential investors (the franchisees) want to buy into, liquidity (both for costs and regulatory requirements), and standardization of practices to be effective.
If your business has yet to do so, register your brand as a trademark. Brand identity is extremely important when franchising, whether you are building a brand or franchising an established one. Hence, it may be best to register your trademark(s) as soon as possible to begin building your brand identity. Strong brand identities can drive the price of franchises higher, so its in the business' best interest to strengthen the brand as early, and as much, as possible.
Additionally, registering a trademark gives the trademark holder a multitude of rights under Federal law.
Create a subsidiary for the business
A business should create a subsidiary entity to serve as the franchisor, or the company that sells franchises. This practice is used for several reasons. First, it helps limit the liability of the original company such that if any liabilities arise from franchising, like lawsuits, the parent company is likely protected. Secondly, the subsidiary is created for ease of accounting. The primary disclosure document, which must be created and disclosed prior to engaging potential franchisees and will be discussed shortly, requires a financial audit for several years prior. However, by establishing a subsidiary, the financial history can only reach back as far as the creation of the subsidiary and would not include the finances of the parent company.
Drafting the necessary documents
Prior to engaging in any talks with potential franchisees, several documents must be drafted. Firstly, Federal and State Law require the creation of a document compiling specified information regarding the company including its financial history, its company officers, any litigation, trademarks, and more. Depending on which accepted format of this document your business uses, this is either called the Federal Disclosure Document or the Uniform Franchise Offering Circular ("UFOC").
Additionally, all contracts that the franchisee would have to sign must be drafted. Primarily, this includes the franchise agreement. This contract sets out the many rules that franchisee's must abide by, including royalties, training, required sellers, signage, marketing, duration etc. This contract is comprehensive, but can be amended.
Importantly, these documents must continually be updated as material changes to the information it contains is available. This means that if any information changes which could impact a potential franchisee's decision to purchase a franchise, then the document must also be changed.
Such documents are highly technical as they incorporate Federal and State law, and require a financial audit. For this reason, attorneys and accountants are generally retained to prepare these documents.
Compliance with State regulations
Although Federal law regulates franchises, State laws impart additional requirements that must be met in order for businesses to offer, or continue to offer, a franchise in that State. Some of these additional requirements include:
Of course, the above are only a small sampling of the variances in State laws pertaining to franchises. Due to the complexity of the regulations pertaining to franchises, compliance should be managed by the business' attorneys so they may update and alter any documents as necessary and inform business personnel of any changes they must make in communications.
It is especially important that all people who are involved in the selling of franchises at the business are aware of the applicable State regulations, and its changes, as some laws may take effect upon first contact with a potential franchisee. Communication between these individuals, and compliance counsel (or personnel) is extremely important.
Ready, set, go!
The legal aspects of franchising are a very technical process at the outset, but once established, compliance and any additional tweaking is all that is necessary. This is only a general overview of the process of franchising, and a business should have an attorney and an accountant guide them through the process of franchising their business.
Protecting one's intellectual property online can seem like an onerous task. This is especially the case with copyrighted content. However, content creators can help protect their copyrights by taking several actions.
Keep in mind that according to the U.S. Copyright Office, a copyright is a "form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works." Notably, copyrights protect the expression of ideas, and not the ideas themselves. Additionally, copyrights attach immediately when the work is fixed in some form of tangible medium of expression (like a book, recording, painting, blog post, etc.) Although it is not necessary to register a copyright for protections to attach, a registered copyright has additional benefits should someone infringe. For more information on what a copyright is, see my earlier post here.
So what steps can you take to protect your creative, copyrighted works?
Place a copyright notice on your work. In the context of protecting copyrights online, you can place a copyright notice alongside your work. This need not be complicated, and can simply state "Copyright 2014. All Rights Reserved." Although this isn't necessary, it informs potential infringers that you are aware of your rights with respect to the work, potentially discouraging them from infringing. For photos, this can be effectively accomplished by watermarking your images.
Define others' rights in utilizing your work. Create a policy (and place a link to it on your site) that tightly defines how people may use your content with and without your permission. Effectively, this creates a route for potential infringers to utilize your work in a manner that respects your copyrights by offering them a limited license under terms you decide. Even better, these terms establish how other people can freely advertise your work.
Consider registering your copyright. Some content, especially if used as a means of generating income, may warrant a Federal Copyright Registration. This is purely optional, although there are benefits to registering a copyright which primarily manifest during litigation. Some of the added benefits of registration include: the ability to sue for attorney's fees; the ability to sue for statutory damages (which is easier to prove than actual damages); a presumption (after 5 years) that the copyright is valid and all facts in its registration are true; the registration itself constitutes notice that said content is copyrighted. Additionally, registration may allow you to transfer copyrights easier.
Find out if your copyrighted material is being infringed upon. Once you are aware that your work is being infringed upon, you can take steps to have the infringing work taken down, or at least attribute credit to you, whichever you deem appropriate. There are many different tools you can use to find out if your works have been infringed upon. Not surprisingly, a Google search is a great place to start as the search engine has both text and image search capabilities. Sound recordings are much more difficult to police as there can be multiple copyrighted elements, in addition to the technical difficulties of searching audio recordings.
Contact the infringer. Generally, there is some manner available to contact someone that improperly posts your content, be it via email, comment, or message. Utilize whatever method you believe to best contact the infringer and request that they remove your content, or point them in the direction of your use policy and request that they abide. If they fail to remove the content or fail to adhere to the policy, locate the website's ISP information. To do so, you can use this site or this site. Once you have the ISP's information, send a Takedown notice (free samples can be easily found through a Google search) to the ISP, which states that one of the sites it is hosting contains infringing material. The Digital Milennium Copyright Act allows for an ISP to be held liable for hosting infringing content. Generally, once the ISP is notified that they are hosting an infringing work, the website will be taken down so the ISP can avoid liability.
When to hire an attorney. If the ISP fails to remove the content, or take down the website, then you may wish to hire an attorney to prosecute your claim of intellectual property infringement. If you have yet to register the copyright of your protected content, then you may have to do so before any litigation may commence.
Following these steps will help you protect your copyrighted content online, allowing you to only worry about creating more content to share with the world.
Last week, the NCAA eliminated a controversial provision of the contracts it requires DIvision 1 athletes to sign. That is, the organization removed the provision that allows the NCAA, or an assigned third party, to use the name and likeness of the athlete to promote NCAA events without compensation.
Currently, the NCAA is awaiting the decision of a Federal Judge in the O'Bannon v. NCAA trial, which is a class action lawsuit brought by former, and current, Division 1 athletes principally challenging the NCAA's use of the athletes' names and likenesses in television broadcasts, rebroadcasts, and video games without compensation. The NCAA's elimination of the name and likeness provision appears to be an effort to distance the organization from the practices which resulted in the O'Bannon lawsuit.
Name and likeness rights, also known as publicity rights, are the personal rights to control the use of one's name, image, or likeness for commercial use. These rights continue to exist after death and are freely assignable. Publicity rights are State specific.
Publicity rights are an important issue for collegiate athletes because intercollegiate athletics, particularly Division 1 football and basketball, is a multi-billion dollar industry where the athletes do not get paid to play, nor for the use of their names and likenesses. Meanwhile, some NCAA conferences and schools have been making millions on media deals and broadcast rights for their sporting events which rely on the use of the athletes' names and likenesses. Additionally, the NCAA had been licensing the use of these athletes' likenesses, at a profit, for video games. In some cases, athletes' likenesses were used years after their college career had ended, capitalizing on players' success and popularity as a professional. Not only were the athletes unpaid for their on-field performance, but they were also unpaid for the use of their likeness, seemingly in perpetuity prior to the O'Bannon lawsuit.
Although there has yet to be a decision by the Federal Judge in the O'Bannon case, it is telling that the NCAA is removing its name and likeness provision from its athlete contracts. However, some individual colleges and conferences still require athletes to sign name and likeness releases. It will be interesting to see how the Court rules on the O'Bannon case, as it has the potential to reshape the business of intercollegiate athletics.
Last week, Lebron James announced that he would be returning to his hometown team, the Cleveland Cavaliers. The following day, the Cavaliers sold all of their remaining season ticket plans. However, the Cavaliers are not the only Ohio business benefitting from Lebron's return.
In anticipation of Lebron announcing what team he would sign with, Fresh Brewed Tees created a tee-shirt design it would sell should Lebron return to the Cavaliers. Fresh Brewed Tees tweeted this design to its sizable following, and within hours of Lebron's decision, the company sold out of its initial batch of shirts. (For more on Fresh Brewed Tees success following Lebron's announcement, see this article.)
The tee-shirt designed by Fresh Brewed Tees serves as a good example of ambush marketing done well. For a brief review of ambush marketing, see my previous post here. Take a look at the shirt design below:
Let's break down the elements of the shirts shown above. Remember, proper ambush marketing does not use or directly associate itself with any protected trademarks surrounding an event. In this case, the event being Lebron's return to the Cleveland Cavaliers.
The most prominent feature of the design is the word FOR6IVEN, which is clearly a play on the word "Forgiven" with the number six replacing the G. The word "Forgiven" does not allude to any trademarks held by Lebron, the Cavaliers, or the NBA. The text is bolded and entirely in capitals, which is distinct from the Cavaliers logo. Additionally, the text is in a different font than the Cavaliers' logo. The number six that replaces the G is also not associated with any known trademark owned by the Cavaliers or Lebron, and exists as an allusion to Lebron's jersey number while playing for the Miami Heat. It is still not known whether Lebron will even wear a 6 on his jersey in Cleveland.
Actually, Fresh Brewed Tees should be able to trademark the term "FOR6IVEN" for use on apparel, specifically tee-shirts. As a trademark is a word, phrase, symbol or design that identifies and distinguishes the source of goods from others, Fresh Brewed Tees could trademark the word to create a line of tee-shirts, or other clothing, which similarly allude to Lebron. A quick search of the US Patent and Trademark Office's trademark database revealed no trademark filings for the term.
THE KINGDOM RESTORED
This phrase is a secondary design element of the tee-shirt, appearing below "FOR6IVEN" in plain text and all capital letters. This phrase is an allusion to Lebron James' nickname "King James," which is trademarked, and is perhaps suggesting that Ohio, or Cleveland, is the kingdom. In the context of the shirt, "kingdom" is somewhat vague. The phrase does not specify what said kingdom is or who rules it. Ultimately, the allusion to Lebron is so removed from the trademark that it would not constitute infringement. Given the phrase "THE KINGDOM RESTORED," there appears to be little, if any, likelihood of confusion with Lebron's trademark.
The image of a basketball with a sword through it
The final element of the tee-shirt is an image of a basketball with a sword through it, placed on the center of the shirt, below all other elements. This element is an allusion to the Cavaliers logo, which also contains a sword and basketball. However, in the Cavaliers logo, the sword is puncturing the team name in the foreground of a basketball. Additionally, the two swords are strikingly similar.
This element of the tee-shirt design is too close to the trademarked logo of the Cavaliers, possibly creating a likelihood of confusion. As the Cavaliers sell tee-shirts featuring their logo, the shirts would be in the same channels of commerce, strengthening any infringement claim. There also is a colorable argument that Fresh Brewed Tees intentionally selected this design element to be similar to elements of the Cavaliers' logo. By implementing the sword and basketball design, purchasers further understand the connection of the above phrases with the team.
On the other hand, if faced with an infringement suit, Fresh Brewed Tees could claim that the Cavaliers' logo is distinct from its design as the sword in the logo pierces the team name and not the basketball. Further, the company could argue that the sword used is generic, and not specific to the Cavaliers' logo. It is unclear whether Fresh Brewed Tees would prevail on such an argument, but to avoid a potential infringement suit, it may be in Fresh Brewed Tees best interest to remove the sword and basketball image.
Although Fresh Brewed Tees ambush of Lebron's return to Cleveland has been financially successful in a short period of time and mostly proper, the company may wish to consider removing the image of a sword through a basketball to avoid a potential infringement suit. Should the company do so, its FOR6IVEN tee-shirts will serve as a primary example of a proper ambush.
Earlier this week, the Supreme Court of the United States of America issued an important decision on the case of American Broadcasting Cos. Inc., Et Al. v. Aereo, Inc. The key issue in this case was whether Aereo could broadcast copyrighted content (which it did not own the copyright to) that appeared on TV without obtaining a license to distribute the content. The Supreme Court ruled against Aereo, holding that its broadcasting of copyrighted content without a license from the copyright holder was unlawful.
Although the case hinged on technical, copyright law concepts which are too lengthy for discussion here, the Aereo case serves as a reminder for a very basic copyright law principle:
DON'T USE ANOTHER'S COPYRIGHTED MATERIAL UNLESS YOU FIRST OBTAIN THE LICENSE TO DO SO
But what is a copyright? According to the U.S. Copyright Office, a copyright is a "form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works."
This means that a work must be:
Copyrightable subject matters include, but are not limited to:
Notably, copyright law does not protect:
However, copyright law may protect how facts, ideas, systems and methods of operation are expressed.
Additionally, copyrights do not need to be registered anywhere for protection to exist. However, there are benefits to registering a copyright with the U.S. Copyright office, such as having the facts of the copyright on public record and also granting the copyright holder certain legal remedies such as statutory damages and legal fees in litigation.
It does not take very much for someone to have copyright protection, so people/businesses should be extra careful when using content in any way that they did not create. When it comes to using material this kind of material, err on the side of caution, and don't be like Aereo. Seek a license to use the work, which you will likely have to pay for, but will come far cheaper than any potential copyright infringement lawsuit.
Quiles Law is an esports and sports law firm based in New York City.
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Attorney Advertising. The information presented in this site should not be construed to be formal legal advice nor is it intended to form any attorney/client relationship. Our attorneys, collectively, are licensed to practice law in the States of New York, New Jersey, and Pennsylvania. Copyright Roger R. Quiles, Esq., 2018. All rights reserved.