MLB consider opposing Overwatch League's Logo

The Overwatch League is a new eSports league that was introduced by popular publisher, Activision Blizzard, in late 2016. The league is in the early stages of formation and is set to have permanent teams rather than teams that are relegated and promoted, like other eSports leagues. As of this month, the first seven teams to take part in the league have been announced and come from the USA, South Korea and China. [1]

However, with a brand-spanking new league comes a shiny new logo design (pictured above) and you may be forgiven for thinking that it possibly reminds you of another well-known sporting logo -and certainly that is what Major League Baseball (MLB) is mulling over right now. It is clear from looking at the two logos that Blizzard has designed the logo with a specific tried-and-tested formula. There is the use of the two-tone colour background and then the white silhouette, both in an action pose. 

Reports state that Activision Blizzard registered the Overwatch League logo as a trademark which was approved by the US Patent and Trademark Office on March 28. Following approval, a period of 30 days is thereafter afforded to companies who may wish to oppose the registration. In this particular case, it is reported that MLB has requested an extension to that period (due to expire on 26 July 2017) to allow them further opportunity to consider their position. [2]

This article aims to explore the nature of trademarks and their value to owners as well as the requirement on owners to defend any potential infringements to prevent dilution of the mark. We will also take a look at some recent trademark disputes as well as key cases. 

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 trademark 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 trademarks are usually provided with two specific forms of protection -

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

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

What is the paramount consideration when considering applications?

Generally speaking, 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.

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. It is essential to protect against confusion as to affiliation.

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. [3]

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).

Adidas claims the trademark 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 trademark in May 2015. When a trademark 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 trademark 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). 

Ultimately, Barcelona backed down and withdrew its trademark application before the USPTO was required to determine the outcome. [4]

Conclusion

As discussed above, if Major League Baseball is to have success in any potential challenge then they will have to be able to prove that the Overwatch League logo is so similar to their own logo that it is likely to cause confusion to the consumer, in terms of affiliation and this in turn is likely to weaken the brand. Further, they may also be successful if they can prove that Blizzard is attempting to profit from the reputation of Major League Baseball and their marketing success (see Nike case).

As a result of the increased commercialisation of sport, IP rights remain an important and contentious issue. Trade mark infringements are not the easiest to pursue, however holders of IP should be aware of their rights of enforcement and ensure that their marks are not diluted and protected from the risk of lapse.


References

1. https://en.wikipedia.org/wiki/Overwatch_League
2. https://www.digitaltrends.com/gaming/mlb-overwatch-league-logo-similarities/
3. Nike International Ltd and Another v Campomar Sociedad Limitada [2005] 4 SLR 76
4.http://www.worldipreview.com/news/fc-barcelona-backs-down-in-adidas-trademark-quarrel-13665? 
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