During 1963, the NFL experienced and dealt with several newsworthy affairs. For example, the league suspended Green Bay Packers half back Paul Hornung and Detroit Lions defensive tackle Alex Karras for betting on games, and the Pro Football Hall of Fame opened in Canton, Ohio. Then after more than three years of litigation, the U.S. Fourth Circuit Court of Appeals reaffirmed the lower court’s finding for the league in a $10 million suit brought by the rival American Football League (AFL). Finally, the NFL established NFL Properties, Inc. (NFLPI), as its official licensing agent.3
Essentially the league formed NFLPI as an unincorporated organization that consisted of independently owned teams whereby they owned and con- trolled such intellectual property as their name, logo, slogans, and other trade- marks. Based on that purpose, NFLPI assumed the responsibility to develop, license, and market the intellectual property of these teams and conduct and engage in advertising campaigns and promotional ventures for the NFL and its member franchises. Therefore, within years after NFLPI had emerged as the legal entity that licenses the trademarks of all teams, several U.S. compa- nies filed claims in courts that challenged the NFLPI and its right to repre- sent and protect such property of teams within the league. The following are excellent examples of these cases and their legal implications.
For at least a decade, NFLPI had granted multiple nonexclusive licenses to a number of different vendors. In 2000, however, the league’s clubs author- ized NFLPI to issue an exclusive license for football headwear with Reebok for a period of ten years. Because of that deal, the NFL’s former vendor of headwear, American Needle, sued the teams, NFLPI, and Reebok under Sec- tion 1 of the 1890 Sherman Antitrust Act. That is, this company claimed the group’s licensing of the separately owned team trademark properties was a contract, combination, and/or conspiracy in restraint of trade.4
In a prior case titled Copperweld, a U.S. court of appeals held that for the purpose of licensing trademarks, the NFL is one source of economic power when it promotes professional football through the licensing of its teams’ intellectual property and thus immune from a claim of conspiracy in restraint of trade. Henceforth, once the court had reached a conclusion that the league was a single entity, the exclusivity of licensing survived any claims filed in court under Section 1 and Section 2 of the Sherman Antitrust Act.
football fan named Frederick Bouchat filed a complaint against the Baltimore Ravens and the NFLPI in federal district court for $10 million in damages. Indeed, he alleged that the Ravens and NFLPI had infringed upon his copy- rights by using a “shield logo.” Bouchat claimed he authored the logo by pro- ducing a drawing of it and then said he submitted the logo to the Ravens or someone else did on his behalf. By presenting his design of the logo to the court, Bouchat achieved the first step to win an amount of compensation from the defendants.5
The second step for the prosecution to win this case, however, was to prove the concept of “access.” Therefore, rather than deny a similarity between Bouchat’s design and the Ravens’ actual logo, the NFL admitted the logos were alike but that there was no way the league could have seen or had access to Bouchat’s design of it. In other words, the similarities were a coincidence and therefore no misappropriation occurred by the league in using the design. After each side presented their evidence, the jury returned a verdict against the NFL, stating there was access based on the designs being substantially sim- ilar in appearance. The league appealed the verdict twice, but lost its claims. At the phase of the trial involving damages, the NFL claimed that the logo’s name was the most important aspect of the transaction and thus dam- ages should amount to the consultant’s fee and not $10 million. In contrast, Bouchat’s attorneys stated that a relationship existed between beer sales at games and the logo. Thus, they sought as damages a percentage of each beer sold in a cup that carried the Ravens’ logo. After considerable negotiations over these dollar values, a new jury assigned to the case returned a verdict of no damages or any financial rewards to Bouchat. This outcome not only pleased owners of professional sports teams, it also restated the two-step process of substantial similarity and access in the determination of infringe- ment.
There are two important lessons learned from this case. First, the owner of an NFL franchise must have an unsolicited submissions policy in place regarding the rights of intellectual property. Second, when a court offers a settlement to a plaintiff, he, she, or they should accept it since some juries are inconsistent in court cases. Although the finding of no damages is difficult to explain given the jury’s first verdict, it was nevertheless legally correct as defined by the law.
During the 1990s, another intellectual property case involved a patent dispute between NFLPI and a Los Angeles-based clothing company named the Hawaii-Pacific (HP) Apparel Group Inc. More specifically, since the early- to-mid 1980s, the phrase “Dawg Pound” originally referred to the Cleveland Browns’ defense and then later to fans who dressed in costumes and woofed like dogs at the club’s home games. In fact, they sat together in bleachers at
the city’s old Municipal Stadium but now form as a group in the east end zone of the club’s new stadium. Anyway, NFLPI claimed senior-user trade- mark rights to “Dawg Pound” because in 1988 the team officially registered itself as the “Cleveland Browns Dogs” and “Cleveland Browns Dawgs” with the State of Ohio Trademark Office. Thereafter, NFLPI issued licenses to vendors to sell Browns t-shirts and other apparel as well as Christmas cards and posters that displayed these phrases. However, when the Browns fran- chise moved from Ohio to Baltimore in late 1994, there was no longer a “Dawg Pound” located in Cleveland.6
Meanwhile, during the mid-to-late 1980s and early 1990s, HP president Donald Shepherd began to manufacture and distribute non-football-related apparel and other products bearing such phrases as “Dawg Pound,” “Lil Dawg Pound,” and “Top Dawg.” He attempted, in fact, to register the “Dawg Pound” trademark with the U.S. Patent and Trademark Office (USPTO) in 1994, even though NFLPI adamantly opposed the company’s application to register the trademark. Later, the USPTO denied HP’s application.
In 1995–1996, Shepherd successfully registered the marks “Top Dawg” and “Lil Dawg Pound” but for some reason, the NFLPI did not oppose his company’s action. As a result, HP sold approximately $10 million of its apparel with the trademark throughout the late 1990s. Subsequently, a new Browns team began to play home games in Cleveland in the early fall of 1999. Iron- ically, in the next few months, the USPTO rejected NFLPI’s intent-to-use application for the “Dawg Pound” mark that it had filed because of its sim- ilarity to HP’s “Lil Dawg Pound” mark.
Four years after a district court in Ohio had dismissed a suit filed by the NFLPI against HP in 2000, the claim reappeared as a court case in order to finally determine whether NFLPI or HP had senior-user status and prior use rights associated with the phrase “Dawg Pound” and to address the issue of trademark abandonment. With respect to the problem of prior use, the court found that no reasonable jury could find HP the senior-user of the mark because NFLPI had licensed merchandise containing the words “Dawg Pound” together with some reference to the Browns or NFL for several years prior to HP’s use of the “Dawg Pound” mark in commerce. However, regarding abandonment, the court observed that the Browns and NFLPI had enforced what they per- ceived their rights in using “Dawg Pound” during 1995–1999, despite no NFL team existing then in Cleveland. Consequently, the court held that no reason- able jury could find that HLPI or the NFL had discontinued use of the mark or otherwise discontinued it with the intent not to resume use of the mark.
The court’s decision suggested three implications for professional sports managers. First, these managers must be proactive and seek federal registration for any trademarks. Second, managers must keep their trademark registrations
current and find ways to continue utilizing marks in commerce because infre- quent use of them will defeat a claim of abandonment by a subsequent user of a mark. Third, managers must maintain sufficient control of the licensing process in order to avoid any minor or major evidence of abandonment.
Besides those special and publicized cases, the NFLPI and/or the league’s teams have dealt in some way with other intellectual property rights issues. These involved, for example, trademark infringement and enforcement, licens- ing of the term “Super Bowl,” an attempt by the New England Patriots to secure a patent on the phrase “19–0 The Perfect Season,” and PBL Sport’s agreement to develop, market, and distribute NFL licensed food products. Furthermore, the NFL established or renewed contracts for using trademarks with such companies as AOL, Nike, Oscar Mayer, Puma, Viacom, and Visa.7
In short, the 47-year-old NFLPI is an important and valuable organi- zation in such matters as legal challenges and disputes involving different types of trademarks and the ownership and control of intellectual property rights. Thus, it plays a critical and prominent role in business for the NFL and its member franchises. In the future, I expect that NFLPI will expand its efforts to protect the league and register its teams’ names, logos, slogans, and other marks.