Trademark rights are the foundation on which sports brands build their reputation and commercial value. Every day, consumers – including sports fans – encounter trademarks, whether in the shopping mall, at a sports event or on their mobile devices.
A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. These signs are protected by intellectual property (IP) rights.
Trademarks enable consumers to select and buy the products of their choice, confident that the goods bearing a given sign will deliver on quality and performance.
Trademarks – the only IP right that is renewable as long as it is used in a commercial context – may be protected by filing an application for registration with a national or regional trademark office and paying required fees. A trademark can also be protected internationally either by filing an application with the trademark office of each country in which protection is sought, or by filing an application with WIPO’s Madrid System.
A trademark registration confers an exclusive right to use the registered trademark. This means the trademark holder can use it or can license it to someone else in return for payment. Registration provides legal certainty and bolsters the trademark holder’s position in the event of litigation. Trademarks are private rights and their protection is enforced through the courts.
A trademark may consist of words, letters, numerals, drawings, symbols. It may also consist of three-dimensional features, such as the shape and packaging of goods, non-visible signs such as sounds or fragrances, or shades of color used as distinguishing features.
The Madrid System for the International Registration of Marks is a convenient and cost-effective solution for registering and managing trademarks worldwide. Users simply file a single application and pay one set of fees to apply for protection in up to 120 countries. They can then modify, renew or expand their global trademark portfolio through a centralized system.
In 2018, more than 61,000 international trademark applications passed via the Madrid System, representing a 6.4 percent increase on the previous year.
In protecting their trademark rights and building their brands, companies, including manufacturers of sporting goods, sports event organizers, sports teams and others, stand apart from their competitors and can build a lasting reputation.
Trademarks are powerful and indispensable marketing tools. In the world of sports, their strategic use opens up significant commercial opportunities to generate income.
Sports fans have a deep emotional connection with the teams, leagues and competitions they follow. Sports clubs like Manchester United, for example, leverage their brand and the loyalty of their fans to increase the club’s revenue and profitability through sponsorship deals and new digital media and content opportunities. From 2015 to 2017, the club enjoyed a 4.6 percent compound annual growth rate in its sponsorship revenues.
Sports sponsorship deals are underpinned by trademark rights and can be extremely lucrative. Recognizing its global appeal and power as a marketing platform, companies in many sectors are turning to sports to build awareness of their products among consumers and drive sales.
Take for example The Olympic Partners (TOP) Program, dubbed “one of the most effective international marketing platforms in the world”. According to the International Olympic Committee (IOC), companies participating in the TOP program generate more than 40 percent of Olympic revenues and ensure organizers of the Olympic Games have access to the technical services and products required to ensure they run smoothly. Under the program, each Worldwide Olympic Partner acquires “exclusive global marketing rights and opportunities within a designated product or service category.” Revenues generated by the Olympic marketing programs are distributed “throughout the entire Olympic Movement” to promote the development of sport in general, and also to “provide financial support for sport in emerging nations.”
Many sports organizations also use their trademark and other IP rights to leverage the value of their brand by licensing them to third parties to produce merchandize, including apparel, accessories, footwear and more.
Manchester United, for example, has a 10-year agreement (running through July 2025) with sportswear giant, ADIDAS with respect to global technical sponsorship and dual-branded licensing rights.
The strategic marketing alliances that now exist between sports organizations and major apparel companies like ADIDAS, PUMA, UNDER ARMOUR, and others, mean that sports clubs and leagues are now fast becoming global lifestyle brands as consumers buy in to the powerful image and values that sports encompass.
Top athletes are also getting in on the game. Many are leveraging their personal brands (built around their sporting success) to generate significant revenue through endorsement contracts with major sportswear and other companies. Recognizing the significant marketing potential of these superstars, companies often pay millions of dollars for sports (and other) high-profile personalities to endorse their products.
WIPO’s Madrid System for the International Registration of Marks offers sport trademark owners a cost-effective and user-friendly way to protect their trademarks in international markets. In this way, the international trademark system supports business growth and buoys business confidence; companies with trademark rights can build a competitive advantage and are well placed to tackle any illicit use of their rights. Consumers also benefit and can be confident that the trademarked goods and services they buy are authentic, genuine and safe. In sum, trademark rights are a win-win for business and for consumers alike.