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December 16th, 2019
2019 Holiday Sports Industry News
An Olympic-Sized Change: USOPC Guidance on Rule 40 and Olympic Athlete Marketing
Following the IOC's removal of certain restrictions on Olympic participants during the Olympic Games under Bylaw 40.3 of the Olympic Charter (colloquially known as "Rule 40") earlier this year, the US Olympic and Paralympic Committee ("USOPC") at long last released its guidance on how Olympic athletes' personal sponsors that are not IOC or Team USA sponsors may run marketing campaigns incorporating those athletes during the Tokyo 2020 Olympic Games blackout period (July 14, 2020 through August 11, 2020). The USOPC now permits personal sponsor advertising during the blackout period under certain circumstances and only for two particular types of marketing: 1) generic marketing of the product, service, and brand that includes one or more Olympic athletes, or 2) athlete-focused marketing reflecting a personal sponsor's support of an athlete's participation in the Olympic Games. The biggest hurdle for the athletes’ personal sponsors is the requirement to agree to the “Personal Sponsor Commitment,” which now puts the sponsor in contractual privity with the USOPC. Christopher Chase goes into further detail here.
The ETA for the NCAA on NIL is TBA
The National Collegiate Athletic Association ("NCAA") Board of Governors recently voted unanimously to permit NCAA student-athletes to "benefit from the use of their name, image and likeness in a manner consistent with the collegiate model." Spurred into action by California’s passage of Senate Bill 206 (which, effective January 1, 2023, will prohibit public and private colleges and universities in California from revoking scholarships or eligibility from student-athletes who monetize their name, image, and likeness ("NIL")), the NCAA will permit student-athletes to use their NIL "in a manner consistent with the collegiate model.” Excitement for this seismic change should be tempered however: “consistent with the collegiate model” does not offer any clarity as to what the Board’s vote actually means for student-athletes at this point and the NCAA’s three divisions have over a year to draft the new rules. Additionally, the NCAA is looking for Congress’ help to pass a national law addressing NIL rights, so that the NCAA does not have to navigate different state laws. Mma Afoaku addresses what these changes may mean for student-athletes going forward.
Influencers Take Note: Disclosures 101
Influencer disclosures remain top of mind at the Federal Trade Commission (“FTC”) – the rules for which affect both brands and athletes (indeed, several athletes were the target of the FTC’s warning letters in April 2017). The FTC recently released “Disclosures 101 for Social Media Influencers” to provide influencers with a plain-English restatement of FTC interpretation of applicable law, focusing on when to disclose (when there is a financial, employment, or personal relationship to the brand), how to disclose (clearly and conspicuously), and what to disclose (the relationship to the brand). Athlete endorsers – and the brands hiring them – need to remain vigilant about disclosing the material connection between the parties. The fact that the FTC found it necessary to issue additional guidance demonstrates that the disclosure practices of influencers are seemingly still lacking and may be a sign of more enforcement to come.
Energizing Its Advertising
The NFL is allowing yet another once-prohibited advertising category: energy drinks. As part of a one-year trial run, the NFL will allow energy drink companies to advertise during NFL broadcast windows on rightsholder networks, as well as on NFL and team-owned media platforms. There are several restrictions though: the NFL must approve the ad in advance; the permitted advertising only applies to energy drinks regulated as food and beverage products, not dietary or nutritional supplements; the advertising must not claim or imply that the product enhances athletic performance; and the advertising may not depict or imply the mixing of energy drinks with alcohol. And although energy drink advertising will be allowed, such brands still may not sponsor the league or its teams.
Nicknames and Trademarks: Beast Mode and Danny Dimes
A soccer coach who has long held a registration in the phrase BEAST MODE SOCCER for training services could not extend registration rights to the same phrase for t-shirts and soccer balls, as both the Trademark Trial and Appeal Board and the Court of Appeals for the Federal Circuit found that BEAST MODE SOCCER is likely to cause confusion with Marshawn Lynch’s registration for BEAST MODE for t-shirts and other clothing. Among other things, the coach argued that there were several third party registrations and real-world uses incorporating the BEAST MODE phrase, diluting the phrase and militating in favor of less protection. But both the Board and the Court of Appeals found this argument lacking, as the near-identical similarity of the marks and the goods at issue were overwhelming. Although Lynch was not directly involved in this action (which was an ex parte appeal from the trademark applicant), he has wisely protected his brand by registering his nickname in various classes of goods and licensing it for several others (including a special edition bike).
While Lynch’s nickname is well-established, a few enterprising individuals are attempting to register DANNY DIMES, the nickname given to NY Giants rookie quarterback Daniel Jones. Much like the LINSANITY-inspired trademark filings when NY Knicks point guard Jeremy Lin took the NBA by storm in 2012, these applicants are trying to take advantage of media hype around an up and coming athlete. However, like the issues faced by the LINSANITY applicants, these applicants will also have to overcome Section 2(c) of the Lanham Act, which prohibits the registration of trademarks that include the name of a living individual who has not recorded the appropriate consent. This prohibition includes nicknames as well as actual names, affording Jones the ability to prevent parties unrelated to him from attempting to register the nickname. No action has been taken yet by the US Patent and Trademark Office on these non-Jones applications.
Noted and Quoted
Disclose, Disclose, Disclose
Digital News Daily quotes Terri Seligman on the Federal Trade Commission’s new disclosure guide for social media influencers.
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