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Sports and intellectual property rights PART 2

Submitted by-Subhash Bhutoria

Link for the PART 1 of the Lecture.

Intellectual Property Rights are also amongst the biggest revenue generator in sports and gaming arena. Be it broadcasting of an event or endorsement by players or license of a gaming software, IPRs are integral and most important aspect of these transactions. It is therefore crucial for the stake holders to clearly identify these rights in the arrangements and specify their role and nature, in writing.

More often than not, the parties in such arrangements does not clearly identify these rights and hence may not exploit them adequately. On the other hand, parties have entered into agreements in respect to rights, which are not specified under laws. The Supreme Court of India is yet to decide the issue of proprietary rights in match score, which otherwise is a “fact” and hence is not a copyrightable subject matter. Personality rights are also not recognized under any law finds and finds its reference only in precedents. It is therefore important that these and any such right, title or interest, which is not recognized under law, is supported by legal bindings, to be considered a valuable right.

Adoption and use of IPRs without due diligence can also become the cause for significant loss of profit and of goodwill. Endorsing a spurious product or for a deficient service can lead to legal actions even against the brand ambassador and hence it is imperative to include terms in the contract, which mitigate such risks. Brands and logos are also subject to conflicts from both domestic and international leagues and teams and hence preliminary checks must be conducted before adopting them for use in relation to the sports.

Merchandizing is another major source of revenue in sports business. At every cricket or soccer match, you would see flood of fans wearing tees of favourite team or the player. Be it clothing, footwears, playthings, stationary or accessories, licensed sports merchandise market runts into several billion dollar worldwide. along with the genuine products, the market of counterfeit sports merchandize has also spiked multifolds. As a matter of fact, during FIFA, 2018, Chinese officials had seized around 1,30,000 counterfeit merchandizes including thousands of football and jerseys.

Conflicts relating to IPRs can arise either where your rights are violated or you are infringing upon someone else’s rights. Dispute may also arise in relation to license fees or royalty or even ownership of the IP rights. In commercial arrangements, parties can predetermine the process for dispute resolution i.e. Courts or alternative dispute mechanisms, choice of law and of the forum. Right owner can also approach the Court through civil or criminal mode to seek injunction, seizure and damages against the violators. Depending upon the facts and circumstances, the right owner can decide the course of action against violations. For example, against a fly by night operator, it would be conducive to seek punitive and exemplary damages instead of rendition of accounts of profits. Brands like Nike, Lacoste, Adidas, Superdry, Luxottica etc. have obtained several favourable orders from Indian Courts.

Well, I hope this lecture would benefit you and the viewers / readers. For any sports or gaming business, it is important to identify the IPRs, manage it diligently and enforce the rights, should the need ever arises.