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Role of Intellectual Property Law In the Sports Industry

Introduction

The sports industry is an industry wherein people, organizers, suppliers, activities, business organizations, and others are involved in coordinating to produce, facilitate promote, or organize any activities, experiences, or business enterprise focused on sports. It includes a basic plan of any sports event to occur till the sports event actually takes place.

Intellectual property rights are those which are specified in trademarks, patents, and broadcasting rights. These rights which in terms of an industry helps in differentiating with the competitors’ present focus on the real products rather than their duplicates.  These are rights that help in differing brands, improve the value of the product, increase the value of certain sports or the equipment used or the products used.

Relation of Intellectual Property Law and sports industry

Any industry needs the basic laws to be present so that there are no cheating, frauds, evading of offenses, escaping from charges, and so on so forth can be avoided. Specially in industries where brand value is of utmost important to be it the player/participant/Organizer/sponsor or anyone. Even in the Sports industry there is no different here because even here everything from a basic place where the sports event will be held to the players who will be playing the match to the sports goods to the broadcasting of that sport all of it matters. And when we see it from this point we realize that this is where the intellectual property law comes into role for the sports industry.  The key encouragements in the sports industry are the continued innovations and creativity.

Sport shows intellectual property (IP) in action. Patents encourage technological advances that result in better sporting equipment. Trademarks, brands and designs contribute to the distinct identity of events, teams and their gear. Copyright-related rights generate the revenues needed for broadcasters to invest in the costly undertaking of broadcasting sports events to  fans all over the world. IP rights are the basis of licensing and merchandising agreements that earn revenues to support development of the sports industry.[1]

IP is the heart of the huge commercial opportunities that are offered by the world of sport. IP rights (especially patents, trademarks and broadcasting rights) – and the legal protection they give – and thus is one of the key factors helping with the economic security of any sports. This in turn stimulates growth of the sports industry, enables sporting organizations to finance high-profile sports events, and provides the means to promote sports development. Business transactions related to sponsorship, merchandising, broadcasting and media deals are all built on IP rights. The sports industry has a growing impact on the world economy, creating jobs, investing in public infrastructure and mobilizing resources. A study conducted by the Management Consultants A.T. Kearny estimate that the worldwide/global sports industry should be worth US$620 billion.[2]

Technological advancements and smart sportswear are the latest trends in sporting goods innovation. Many companies such as Addidas, Nike, Puma, Asics and other spend a good amount of their money in Research and Development(R&D) for helping in better performance of the athlete/player. These advancements also give each company their upper-hand in some or the other area such as their growth in followers from around the world, more commoners buying their goods etc  for example if we take the  neon-yellow Nike Zoom Victory Elite spikes which are the part of the Nike Volt Collection which was specially designed for the Olympic Games, it was launched in 2012 and worn by 10,000 meter and 5,000 meter champion Mo Farah, along with other 400 athletes. The shoes weight is even less than 100 grams. Even Adidas adizero Prime SP sprint spike developed with the help of American sprinter Tyson Gay and British heptathlete Jessica Ennis also comes in at under 100 grams. This is important key formula of driving the development of sophisticated new products. Thus, results in the encouraging record-breaking performances.

The growth in prospects to the sport high technology with regards to smart wear are such that many non-sports brands are eager entering this side of market to increase their revenues and their markets arena. Leading manufacturers of consumer electronics, such as Apple, Samsung, are working closely with top sports brands to create new sports-related technologies. Back in the year 2017 Apple Inc., for example, collaborated into the sector with its Nike+ Apple Watch series 4 sports kit which, through which the sensors in the Nike+ shoes, enables Apple watch users to obtain real-time feedback during workout sessions and to track their performance. The watch has special straps and GPS enables and more different features specially built for athletes. These collaborations interest in this buoyant market which in turn, promises to give rise to new joint ventures and licensing arrangements. The success of these ventures would hinge, in other words it would lead to effective IP asset management. This will also make access to affordable, efficient and user-friendly IP services.

The sporting goods in the 21st century symbolize sports as lifestyle and fashion. Product designs, either being retro or forward-looking ones, any of them, they are crucial to a product’s commercial success. Protecting the rights of these designs is equally important. Design rights (design patents) is an important tool to enable sporting goods manufacturers to defend against sidestepping and infringement of their designs. In 2012, Nike filed a complaint in the US District Court of Nevada against an Asian footwear manufacturing company, qiloo International Limited claiming that 23 of its registered design patents had been infringed.[3] In todays world the ability to be able to obtain trademark protection on a rapid and regular basis as well as cost effectively is very important in multiple markets across the globe.

 To elaborate as to what all IP rights can a sports good have lets considerate the one that is commonly used by all athletes around the world – shoe. It is protected by several of IP rights such as :-

  • Patents protect the technology used to develop the shoe
  • Designs protect the “appearance” of the shoe
  • Trademarks distinguish the shoe from similar products and protect the “reputation” of the shoe (and also the company manufacturing it)
  • Copyright protects any artwork and audio-visual creations used to publicize the shoe.

 To the next aspect of IP rights being a backbone of the whole of the sports industry can be seen when all Business transactions related to sponsorship, merchandising, broadcasting and media deals. The sports industry leaves a great impact on the economy worldwide, it is an industry that is helping in creating jobs, investing in public infrastructure and mobilizing resources. The IP system, and trademarks in particular, play a crucial role in safeguarding the unique character of the Olympic Games and of other sports as well all across the world when it comes to their identifications, for example the Olympic game the torch, Olympic symbol, Olympic emblems, the flag, and the anthem are all exclusive to the Olympic game, no one is allowed to copy them or use them in any ways they want to. The Olympic game have such high bars that there are tons of people willing to sponsor them and yet there are tons who use the way of Ambush marketing. Ambush marketing is when any brand without actually sponsoring the event uses the goodwill of the game to create hype and its own goodwill and interest of people in the product they sell. This type of marketing hinders the genuine sponsors. Thus game like the Olympics have a stringent agreements of sponsorships.

The 2014 FIFA World Cup illustrates the massive economic potential of copyrights generally, and broadcasting rights specifically. The final match between Brazil and Germany was watched by an estimated 1 billion fans, and despite it being played at 3:00 am local time in China, 30 million Chinese viewers tuned in.[4] Ninety percent of Dutch households watched the semi-final between Netherlands and Argentina. Two years earlier, the International Olympic Committee estimated an audience of 900 million for the opening ceremonies in London (4.8 billion viewers throughout the games), and almost 114 million viewers tuned in for the 2017 Super Bowl.[5]

The broadcasting rights are when any game is going to happen they sell these broadcasting rights where only the media outlet that has the right can broadcast it. Under the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention) of 1961, broadcasters have exclusive rights for 20 years to authorize rebroadcasting, “fixation” (recording), reproduction, and communication to the public of their broadcasts. However, there is wide agreement that the protection of broadcasters’ rights needs updating to accommodate the digital communications revolution. [6] Sports has become an industry worth billions of dollars. Due to the IP rights which helps in keeping a close relationship between the media, sponsors, and authorities.

With the ever-evolving technologies now there are sophisticated communications technologies, accessible to the public at large, that have not only enabled fans to follow live sports wherever they may be but have also opened new possibilities for signal theft. Signal theft is when some other media outlet steals the signals and then broadcast the same on their channels without actually buying the rights to do so.  Live sports broadcast has been a particular target for many unauthorized retransmissions on the internet on daily basis.

Signal piracy threatens not only the advertising and sales revenues of the broadcasters who have paid for exclusive rights to show the live coverage of sports events, but it also risks reducing the value of those rights and hence affecting the revenues of sports organizations. There are national laws that provide various options for tackling signal piracy, including shutting down illegal websites, broadcasting organizations have taken a step ahead for better legal protection at the international level. At the same time, broadcasters and sports organizations are using digital media to reach out to and engage their audiences, especially younger viewers, by offering sports coverage in a variety of formats.[7] 

Not only globally but even the Indian arena is also catching up with an enormous increase in the number of franchise-based leagues of different sports that have come about in the last decade. Indian Premier League for cricket, Hockey India League for hockey, Pro Kabaddi League for kabaddi, Indian Super League for football, International Premier Tennis League for tennis are only a few to name in this country of leagues related to the variety of sports. This enormous change in the sporting culture of this country has widened the scope of sporting brands and hence that of IPR as well even in India specially for more sponsorship and enabling new talented faces to play.

The importance of IP in the business strategies of sporting goods companies cannot be overstated. It is a key factor in enabling companies to remain competitive, as well as an essential element in the battle against counterfeiters, to which sporting goods manufacturers all too often fall prey. The Sporting Goods Manufacturers Association (SGMA), the trade association of leading industry sports and fitness brands, estimated that the retail value of fake sporting goods seized by customs and enforcement authorities in 2010 in the US alone was some US$1.4 billion.[8]

Conclusion

  1. With the sports industry being so vast in terms of opportunities that are needed, it becomes essential for IPR to be there for the safeguarding of the industry with rules and regulations.
  2. Due to the ever-evolving and developing sports industry it is very much needed that the sports fraternity and the sports industry have a broad range of IP rights for it to be helpful in and effective in coming years.
  3. There is a huge threat with the increase in consumers the counterfeiting of products is also taking place, hampering the growth and stability of the market.
  4. With the increase in technology even broadcasting has become an issue, though governments are striving and putting the best effort with stringent rules, this fact can not be ignored.

Thus all aspects of sports industry seem to be using the Intellectual right in every possible way to benefit the most from them. Be it in the designing of the goods, production of the goods or anything else. IPR plays a key role to it.


[1] https://www.wipo.int/ipsport/en/#:~:text=Sport%20shows%20intellectual%20property%20(IP,result%20in%20better%20sporting%20equipment.&text=IP%20rights%20are%20the%20basis,development%20of%20the%20sports%20industry.

[2] Dr. Jochen M. Schaefer, Legal Counsel, World Federation of the Sporting Goods Industry (WFSGI)

[3] https://www.scribd.com/document/80766087/Nike-et-al-v-QiLoo-International

[4] https://www.theglobalipcenter.com/wp-content/uploads/2018/06/023441_GIPC_Sports_Econ_Insides_03.pdf

[5] http://www.independent.co.U.K./sport/olympics/news/london-2012-opening-ceremony-audience-hit-900-million-predictsioc-8015361.html, https://www.hollywoodreporter.com/news/how-people-watched-super-bowl-2017-viewership-stats-973096

[6] https://www.wipo.int/ip-sport/en/broadcasting.html

[7] https://www.wipo.int/ip-sport/en/broadcasting.html

[8]https://www.wipo.int/wipo_magazine/en/2012/05/article_0005.html#:~:text=The%20Sporting%20Goods%20Manufacturers%20Association,was%20some%20US%241.4%20billion.

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