Sport – value of intellectual property and protecting your branding

The value of effective branding and capturing fans is a growing business in sport. 

From sport logos to lucrative sponsorship agreements to platforms and apps, the importance of intellectual property (IP) cannot be overstated in the world of sport.

This article considers the following: 

• Key brand protection principles
• Successful commercial contract considerations
• Importance of well drafted terms and conditions.

Key brand protection principles

Brand protection centres on creating, securing and maintaining IP rights and a positive brand image. 

Protecting IP can help guard against third parties copying your brand or products or damaging or diluting your brand in other ways.

Where not adequately protected, this can cause damage to your business’ reputation, profits and long-term viability. Concerns such as litigation and financial penalties could also arise, if your branding infringes someone else’s intellectual property rights.

Businesses and athletes often own and use various different types of IP, including: 

• Trademarks: brand name, logos, unique strap lines and slogans can all constitute trademarks.
• Copyright: copyright arises automatically in any unique work that you or your contractors or employees may create for the business. This can arise in artistic and literary works, text, music, photographs, videos, sound recordings.
• Designs: design rights arise in the appearance of products such as a repeating textile pattern or the unique shape of an item.
• Trade secrets: business may have its own unique formulas, techniques, recipes, processes or algorithms that give it a competitive advantage.
• Some of these rights may be registered and some may not.

To support brand protection, it is advisable to apply sound commercial contract considerations.  

Some examples of documents good to have when considering commercial contracts, include: 

• Non-disclosure agreements
• Copyright notices
• Commercial contracts
• Terms and conditions
• Platform terms
• Staff/consultants/contractor contracts
• Brand guidelines

Ownership of intellectual property

When giving effect to ownership, it is advisable to consider the purpose of the contract and whether any deliverables will be created what requires to be done with those deliverables.

Licenses/permissions to use intellectual property

Licenses are another option that be used in relation to the use of IP and can be as restrictive or as wide as you wish.

Some things to consider are: 

• should the other party be able to transfer/sub-license your intellectual property to a third party ?
• should you be able to continue to license your intellectual property to other parties or will the license granted be exclusive to them ?
• can it be used for a specific purpose or fairly widely etc. ?

Importance of well drafted terms and conditions

Given the high value/profile of sport and potential to reputational damage, sound brand protection is paramount.

In summary, the following helps to maintain and protect your brand:

• Identify – assess what rights your business currently owns and uses and identify any gaps in ownership or use.
• Register – ensure that all your important intellectual property rights are properly registered and that all registrations are maintained and updated.
• Review and ensure well drafted terms – review your portfolio and contracts regularly as your business changes and develops to check for new intellectual property rights that may arise and need protecting and old rights that you may no longer require or can exploit through licensing or assignment.
• Monitor – set up watching and monitoring services so that you can take early action against conflicting registrations and applications and develop a strategic approach to protecting your brand.
• Enforce – work with your legal advisors to develop an appropriate and proportionate enforcement strategy for your business.

As the value of sports business continues to increase globally, so do the opportunities for rights’ holders to commercialise IP and increase their profile.

IP rights foster more innovation and creativity by ensuring that creators and inventors are rewarded for their work. IP rights also protect the goodwill held by brands and allow rights’ holders to prevent third parties from copying or using their IP without their permission. By encouraging innovation and creativity in sports, IP rights further provide access to new methods of performance enhancement and consumer experience.