Khel Kanoon

Sports Merchandising and Laws in India, by Arijit Mishra.

Posted by LAW BEES on

 According to Jibi George,

“The Indian Sports licensing market is digging its heels in and is ready to play ball.”

Introduction

Different countries are famous for their achievement in different kinds of Sports. For example, in a country like India, while every kind of game finds its place, cricket has its own separate place. The UN has also officially admitted sports as a method of advancing health, education and development.

There is a need for certain laws to streamline the field of sports. Merchandising of sports involves the deal with many laws and going into various contracts and agreements.

Sports Merchandising

Before going into what sports merchandising is, let us first look into what merchandising exactly means-

Merchandising refers to the activities of selling goods or of trying to sell them, by advertising or promoting a particular product and making them available for the retailers. It also works on promoting sporting events, teams, etc..It also involves various agreements with respect to licensing. Sports Merchandising involves Intellectual Property for the protection of logos and patent-related issues. Sports Merchandising can be classified into-

  • Merchandising related to Sports Personalities.
  • Merchandising related to teams and clubs.
  • Merchandising related to events, leagues, and tournaments.

There are various clubs and leagues across the world who take advantage by means of promoting through merchandising and licensing. Example – Liverpool, Chelsea, Manchester United, etc. these are the names of the teams who successfully gained an advantage in economic fields upon sports merchandising.

Sports Merchandising in India

In the year 2001, Indian Cricketer Sachin Tendulkar was offered a Rs. 100 Crore deal with Mark Mascarenhas, a sports management firm named WorldTel. This move, while being heavily criticized, was perhaps the point where sports merchandising was introduced in the Indian sports area.

One major example can be IPL. When IPL was introduced in the year 2010, each and every bit and part of Indian cricket got commercialized and merchandising played a major role in the sports market and sports industry.

Now, let\’s take the example of football, it holds the largest percentage of share in the sports merchandising industry all over the world. Due to the growth of the viewers of the football tournament and its demand in the last few years, it plays a major role in the sports industry. Now, the football club merchandising has a huge demand in the Indian Market like Real Madrid, FC Barcelona, etc.

In India, due to the emergence of various sports tournaments like IPL, ISL, etc, there is a large growth in the market.

Sports Licensing and Merchandising Rights

  • Merchandising and licensing is a very vast and complex subject.
  • Where there is sports personality, licensing the Agreement must contain a “Morality” clause to guard against all the predicted situations affecting the values of the sportsperson. Any breach of the provisions may trigger the termination of such licensing or merchandising agreement.
  • Special attention shall also be given to the financial and fiscal provisions of the agreements, where such sports licensing or merchandising program is of International level.
  • It is also advisable to include a “Dispute Resolution Clause” for the disputes which can be referred for arbitration and mediation.

Relation of IP Law with Sports Merchandising

Before dealing with the legal aspects of sports merchandising, we should first know what laws are applicable and involved in it. The most important law which is involved in it is Trademark Law and other Intellectual Property laws.

Let us first get into the relationship between IP Laws and Sports Merchandising. IP Laws plays a major role in sports merchandising because it includes patents, trademarks, designs, copyrights and other intellectual properties. Trademarks are mostly used in the sports industry. The things that come under the trademark are –

  • Names of league and franchise
  • Flags
  • Logos
  • Taglines

Trademarks give value to the brand by giving identity to it. Those brand values are used for merchandising and taking revenue and profits from it. Trademarks are registered under different categories like glassware, clothing, etc. Like Manchester United Football Club, apart from being a football club, they also sell their merchandised products like caps, bags, clothes, etc. So, of trademark, the logos are also protected from unauthorized use and counterfeiting.

In the case of a trademark dispute, the stakeholder has to prove 3 basic requirements in order to avail the remedy. They are –

  • Trademarks must have obtained goodwill in the market.
  • The trademark must be misrepresented by the other party.
  • And, due to this misrepresentation, a damage is to be caused to the stakeholder.

Goods and services which are related to merchandising are mostly covered under trademark laws because every class of goods will have their tagline, logo, or name printed or carved upon it.So, let us understand this in the given illustration:-

Mumbai Indians, which is a franchise in the Indian Premier League is going to sell its merchandised goods and apparel. So, it will be using its logo which consists of a razor which is coloured as saffron, white, green around it, and in order to protect it, they have to register it under the trademark laws. Their tagline namely, “MI PALTAN” will also be protected under the trademark laws. Once it gets registered, they can claim damages for any unlicensed or unauthorized use of the logo and the tagline.

The process of trademark registration changes from country to country. In India, it can be done by a trademark agent or by a lawyer. Internationally, it can be registered through the Madrid System of Registration of Trademark, which is also applicable to various territorial jurisdictions.

Personality Rights under the Copyrights Act, 1957 are the other Intellectual Property that is involved in the practice of merchandising. They are the rights that are available for an individual to control the exploitation of his image, name, or any part of his personality. Though nowadays most of the famous sports persons are becoming brands themselves, it\’s important because of the celebrity status which is formed due to the popularity which can be used for image creation, brand endorsements and also gaining monetary profit from it.

Many of the famous players like Sachin Tendulkar, Cristiano Ronaldo, Virat Kohli, have registered their name as trademarks because no one can use their name for gaining any monetary profits.

Now let\’s see how personality rights are applicable in merchandising and licensing.

Nowadays, the gaming industry is getting more popular, especially in the gaming sports industry. The gaming production company uses the name of the big players in those games, and the players having its trademark restricts them to use. If they use it, in return to that, royalties are being received by the players.

For example, there is a PC game of football named FIFA, which has the name of the footballers, which have been trademarked by the owners, FIFA has to make a contract with them and offer them some royalties.

Similarly, as we can see in the leading video game companies, Electronic Arts or EA Sports which is famous for cricket video games called EA Sports Cricket. Thus to avoid such problems, they use fake names that look similar to real players like- Sachin Tendulkar to S.Tender, M.S Dhoni to D. Dhenier. This is done to ignore the cost of licensing.

Famous players are also associated with product and brand apparel. In such type of association, the brand and players sign an agreement to produce merchandise products having names and using the personality rights of the players.

The companies get more profits by showing those famous names of famous personalities. Some such examples are Virat Kohli associated with Wrong, M.S Dhoni associated with Seven, Yuvraj Singh associated with Yuvican, Christiano Ronaldo associated with CR7.

 

Another use of personality merchandising is having personal apps games for smartphones or the internet. Most of the famous players have their own apps as part of merchandising. Some of the examples are Sachin Tendulkar, Ravindra Jadeja, Murali Vijay.

In 2019, Virat Kohli got into a contract with a cartoon production company for producing a new series of cartoons named Super V, in which the main look of the cartoon looks like Virat Kohli itself.

Conclusion

As we saw an unpredictable growth in the last decades, the sports industry licensing and merchandising has become a big profitable market. It is based on the goodwill associated with the licensor\’s products which cover the path to a profitable market. We also know that licensing and Intellectual Property laws are connected with the growth of the merchandising industry in sports.

It is quite obvious that the future of the sports industry depends on the growth of the merchandising industry as it popularizes the sports and also generates a heavy revenue out of it. This vast change in the sporting culture of this country has expanded the extent of sporting brands and also the Intellectual Property as well. The present-day scenario of sports has changed not only due to the ratio of the people who participate but also because of the increased viewership.

-Arijit Mishra

KIIT School of Law

 

References

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