Trademark Take-Over or Sui Generis Regimes - Absolute Merchandising Rights in Sports

Abstract

When considering justifications for market intervention, there are two possibilities. We can consider the justification for each individual right in intellectual property, i.e. copyright, design, geographical indication or trademark, separately. Alternatively, we could consider the market position conferred by IP rights in general in a particular field, before considering whether market intervention is justified via a particular form of IP protection. The latter, i.e., horizontal intellectual property law issues are seldom considered. A natural consequence of this is that horizontal issues related to the rest of the legal system are also ignored, or considered from only one perspective; e.g., trademarks are balanced against freedom of speech concerns. I argue that it is here, when protection crosses over the interface between IP rights, where the system is most vulnerable to over-protection and thus, where we should ask the question whether a justification for protection still exists. Therefore, before considering an extension of protection of rights in sports merchandising, one should consider the extent to which the trademark owners in question already enjoy protection under the well-known marks and famous marks doctrines. In fact protection can be quite extensive. Similarly, a sport franchise also enjoys protection via contractual arrangements and extra-judicial enforcement efforts, thus achieving a stronger market position than the regular trademark owner that is otherwise constrained by competition law. Lastly, it is necessary to consider the scope of protection when protection is considered justified, since the societal cost of overprotection in scope of an (already) absolute right naturally is great. This article argues that in each case, at the outskirts of trademark law we should apply a two-tiered justification-test. In addition, the concept of use as a trademark or trademark use could serve as an indicator of when the use should be presumed infringing or fair. However, the justification-test would give a voice to uses that have traditionally, albeit implicitly, been considered outside trademark law. While it is evident that few sports franchises would pass the justification-test, and join the sui generis regime where the Olympics reign alone. There are several actors in the on-line world that would benefit from legal rules that are based on a holistic perspective rather than one based on each field of IP separately. Rather than pushing on line-actors into a corner, we could regulate in the holistic and flexible way required. Using the justification test, while understanding protection to mean, not affording IP rights, but protection against a multitude of IP actors or the abuse of IP rights, may allow us to create sui generis regimes on-line that are designed to foster competition, and weed out unfair competition and dishonest commercial practices.

Keywords: trademark, merchandising right, sports merchandising, international law, sui generis rights, Olympics

JEL Classification: K2, K33