As competition for the hearts and minds of new generations of sports fans and the sports broadcasting dollar have intensified, we have seen a number of sporting codes, in particular the football codes, looking to expand into new markets.
A new Victorian based rugby union team, the Melbourne Rebels, will debut in the Super Rugby competition in 2011. In the round ball code, this year saw the debut of the second A-league club based in Melbourne, the Melbourne Heart, with a second Sydney based club, Sydney Rovers FC, set to commence in 2011-2012. Meanwhile, one of the most well publicised and debated expansion plans has been the AFL granting new licences to the newly formed Gold Coast Suns and an 18th team based in the non-traditional Australian football territory of Western Sydney.
A sporting club's identity and marketability is bound up in its club name, nickname, logo, colour scheme and playing uniform.
When building the identity for a new club, the process itself has proven to be an effective way of generating interest and publicity, with robust debate in the media and online discussion forums by prospective supporters and fans of future rivals. A number of new clubs have even opted to give supporters a chance to have a say in the selection of their team's nickname.
While supporters are given an opportunity to participate, creating any new brand presents a number of intellectual property issues. The choice to create a new sporting club represents a significant investment and is often accompanied by the risks associated with entering competitive and potentially hostile markets. It is critical to ensure the club's proposed branding is firstly capable of being protected, and secondly, that any associated risks of intellectual property infringement are understood and mitigated.
There are a number of precedents for Australian sporting clubs facing the ire of competitors, such as the Townsville NBL team, which in the late 90s was forced to rebrand from the "Suns" to the "Crocodiles" to avoid paying royalties to the NBA, the owner of the "Suns" trade mark in Australia. A similar fate met South Melbourne FC during its brief time in 1996 as the South Melbourne "Lakers".
Intellectual property law does recognise that different sporting teams with the same nickname can coexist, either where the respective trade mark owners agree to coexist, or the manner in which the respective trade marks are used suggests that consumers are unlikely to be misled or confused into thinking there is any relationship between the two teams.
However, where teams with the same name compete in the same or closely related sport or are based in the same city or region, it would be much more difficult to argue that consumer confusion is unlikely to occur. Furthermore, some clubs are so established or well known that a similar name used to promote a different sport might still result in infringement. There are also a number of unique or invented nicknames, such as Port Adelaide Power, New York Knicks or San Francisco 49ers, which would create a more significant obstacle to use and register as a trade mark.
It should also be noted that potentially conflicting trade marks are not limited to rival sporting club names. There may be conflicting trade marks registered in respect of goods which could prevent the use of a proposed name on club merchandise, such as clothing, sporting equipment, publications and memorabilia.
Not all names are capable of protection as trade marks. If a proposed name is likely to be needed by other traders, because for example it merely describes the geographic location of the club or even the colours worn by the players, it may not be possible to register as a trade mark. In order to gain protection of the name, the applicant would generally need to show that the trade mark has become distinctive of that team because it has been used extensively over a considerable period of time.
It is not just the choice of name and logo that is important. There are a number of famous clubs with iconic colour schemes or uniforms that, if adopted, might give rise to allegations of misleading and deceptive conduct. Likewise, there may be playing uniforms which are subject to protection as trade marks or registered designs that would prevent the use of a proposed design.
These factors all have the potential to severely affect the ability of sporting bodies to exploit branding associated with a new sporting club and present a significant risk in a highly competitive marketplace. It is therefore critical that the selection process for a new sporting club's identity involves comprehensive intellectual property searches to determine whether proposed trade marks and designs are able to be used and registered. Where risks are identified, strategic advice should be sought on how to overcome or minimise these risks.
Middletons has expertise in advising sporting bodies on intellectual property issues, including advice regarding the selection of names and trade mark filing strategies for new sporting teams.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.