WIPOD – Page Points: Transcript of Episode 24

Intellectual Property and Sports

Justin Koo

Especially for youth sports and things like that, intellectual property is not just for the big boys, it's not just for the big girls in the sports. It's not just for you you're know, you you're Chelsea's and you're Real Madrid’s it's also for your grassroots football teams your grassroots cricket teams, etc.

Understanding the value of IP, understanding what IP is about, I think is really the starting point. There needs to be a much greater push to educate.

Lise McLeod

Justin Koo

Thanks for having us and we're looking forward to having a great conversation.

Lise McLeod

Nice to meet you both. Thanks, Justin.

So for my first question, Jason, in your co-authored introduction, you describe intellectual property as central to the commercialization of sport. How do you see this relationship evolving as the sports industry continues to grow?

Jason Haynes

Very many thanks for your question, Lise. So just to provide some context as to the relationship between IP and sports. You know, initially, when Justin and I discussed this idea, we realized that over the last several years in particular, this particular space has become a hotbed for IP litigation. And indeed, there is tremendous interest from among broadcasters from among sports personalities, from among sporting organizations, and broadly speaking, a wide range of organizations on this particular issue. And so we felt that there was a need for a systematic text to address these wide-ranging issues as they arise. And one of the things that immediately became evident is that in this new dispensation of sport, commercialization is at the very heart of it.

Now, if we turn to UEFA or FIFA or the National Cricket Council or any other major sporting organization, what becomes immediately evident is that they have a significant vested interest in  monetizing the opportunities presented by, in particular, broadcast rights but also a wide range of other rights, including rights associated with trademarks in terms of their paraphernalia, and logos and related items. And even insofar as the hosting of sporting events is concerned, indeed, many sporting organizations are concerned to protect the investment that they've made insofar as the hosting of those events.

But equally speaking, we found that sponsors have a vested interest in that regard as well. And so when we looked at the issue from both a macro as well as a micro perspective, we were very clear in our mind that if there was one word to describe what we're currently seeing in this particular sphere, it is that of commercialization. That at least increasingly, are trying to monetize their persona. That indeed sporting organizations are trying to monetize their broadcast rights over the events and questions and broadcasting companies themselves are very much inclined toward doing so as well. Then of course we have sponsors equally who are trying to monetize and indeed we have consumers who are trying to benefit in that regard.

And so here you have an ecosystem which has been created with all of these overlapping actors I should say seeking to monetize. But of course equally we note that whenever there is significant money involved, as we've seen in particular recent years, insofar as the commercialization of sport is concerned, there are going to be threats. And what we found is that intellectual property rights, like many other spheres of sport, have become increasingly vulnerable to infringement.

And so we wanted to assess this development that we are seeing right before our eyes, this evolution, you were to describe it as such, against the backdrop of the various entities and various interests that are at play. And we wanted to look at what opportunities exist in that regard from an individual perspective, but I think a broader commercial perspective, as well as the challenges which exist in that regard. And so the chapters therefore broadly reflect our interests in that regard.

Lise McLeod

The book takes a comparative perspective across multiple jurisdictions. Based on your research, which legal systems appear to be most effective in addressing intellectual property issues in sport and what features make them so?

Justin Koo

Yeah, so thanks for the question, Lise. This is a great question, and I think it is a classic interdisciplinary or multidisciplinary question because I think we have to tackle this issue looking at the setup of sports in itself as an institution. So that's one level of the discussion. A second layer of the discussion relates to the status of intellectual property laws in that particular region. And then I think a third aspect of this is also just related to administrative law and the way that administration principles are enshrined in the particular jurisdiction that you're looking at. So you'd find that the countries that have the best protection for sports issues and whether it's IP or otherwise really have very strong administrative law frameworks because a lot of the issues that come out of sports are not necessarily sports centric or not necessarily intellectual property centric alone. It's sports plus IP plus administrative issues.

So you'd often find that the countries that have the most well-developed national governing bodies or have the best developed leagues and things like that would have the best protection of their intellectual property rights. And a big part of that is because they have the knowledge and the awareness of the value of the intellectual property rights to the league, to the players, to the institution. In some countries, it's a national interest in sports.

So when you look at India, for example, because cricket mania there is crazy. You actually see them designating that the sport of cricket is a national interest. When you look at the administrative laws, they designate that the operations of cricket related matters is an issue of national interest. So they've put that right at the top of their national agenda, their policy agenda. So the development and growth of cricket is nationally centralized. So the government and the legislature have taken a real interest in that. So of course they're going to protect the intellectual property issues and commercial issues that come out of the sport of cricket in a very significant way.

If you compare India to, let's say, another developed country, you know, where they have well-established leagues, let's take the UK, for example, the FAPL, so the Football Association Premier League, they've been very heavily litigious in protecting their broadcasting rights in particular, as well as their trademarks. And again, you see that because there's a well-structured administrative framework in place, there's good knowledge and understanding of the intellectual property rights and you have this strong IP framework and an understanding that a big contribution to the GDP, a big contribution to tourism, et cetera, are sports related. They put great emphasis on the protection of the commercial elements of sport.

By a total left field pitch to let's say a developing country like Trinidad and Tobago, we have very robust intellectual property laws and I'd say that across the Caribbean as well. We have very robust intellectual property laws, but enforcement is weak. Understanding knowledge management in relation to sports, in relation to intellectual property rights, also very weak, generally speaking. The average person may know about the word copyright, may know about the word trademark, but they're not going to have a big understanding as to what the value of it is or how it works in practice.

And I think that's the main difference there between your developed countries, you're developing on your least developed countries, and then you also have a sort of, you know, the in-between countries like India that have this very real understanding about what sports is, what sports means to them and the value inherent in it. So I think in answering the question directly, it's really just looking to see, you know, it's not IP alone, it's not commercialization options alone, it's a combination of all three, as I said, administration, IP and commercialization.

I think one of the big issues that we also see arising across countries as well is the impact of sustainability development in a sporting context. So we talk about sustainable development in a lot of an environmental context, but I think there's a lot more to be said in the sporting context as well. Even in your developed countries with developed leagues, you're seeing a lot of smaller teams in your third and your fourth divisions, your grassroots teams suffering financially because they just haven't really invested the time and the effort into developing their IP and that's one of the things I feel very strongly about.

I think just to add to what Jason said in relation to the first question, a big part of the book is also the sort of pushing the agenda that there's a element of sustainability that needs to be developed further in sports. Entities, whether you're a sporting team, an athlete, a league, et cetera, should not be dependent on sponsorship. Rather, you need to grow your intellectual property rights to make them commercially viable, build them on as a core part of your actual offering in your branding basically. And from that you could leverage further on sponsorship. You could grow sustainably, you could become independent, you're not going to rely on government funding, you're not going to be reliant on sponsors and things like that. So that avoids a lot of the big issues that comes out in the sporting context related to IP.

Lise McLeod

Thank you, Justin. So following from that, there might be the challenge of enforcement, particularly in relation to broadcast piracy. And it could be a theme to consider. How do current legal mechanisms respond to this challenge, especially in fast moving digital environments?

Justin Koo

Yeah, so I could take first stab at this and then Jason, you could jump in. So I think the initial issue with this was really the wild, wild west of the Internet, especially in the mid 2000s when live pirate streams became a big problem, right? So on the back of a peer-to-peer file sharing, the next big step on the big issue for IP was then pirate streams. So we're talking pirate streams in sports and we're also talking pirate streams in movies and TV series and things like that.

But sports is very unique because the value inherent in the broadcast is very time sensitive. It is most valuable when it's live, when it's occurring. And initially the law didn't really cater for that. So it treated recorded media and live media in the same way. And that created a big challenge because when the football match was taking place live, if you didn't know what website you could access it legally on, it wouldn't be until weeks or months after that the court case comes up about the particular website. So for example, one of the most well-known ones that was actually litigated was FirstRow Sports. And there was a series of case law in the UK, as well as across the EU, trying to get access to FirstRow Sports blocked via the ISPs.

There's a whole ecosystem built into the piracy model here. So it's not just the persons who are uploading the pirate, links to the pirate streams, it's the intermediary websites. The ones that are link aggregators like FirstRow Sports and others that aggregate all of those links. And then you have other websites that promote access to the links on a third party website. And then you also have the ISPs coming in. So the internet service providers coming through the back door by the back level because they're providing access to the internet.

The initial legal approach was to contact the ISPs, ask them to block access to these websites and that sort of nips it in the bud at the root, right? But again, that initial approach didn't really work because the value in the broadcast is already lost by the time that the case comes up into play. So people have already watched the game. And then the minute you remove one website, there are thousands of mirror websites. So you remove one, 500 more pop up.

What actually then happened, and this was really due to the Football Association Premier League. So I will say that the Premier League in the UK, have been instrumental in leading the charge in IP protection and IP development for sports generally. And they lobbied for the introduction of something called the live injunction. So you can apply to the court with knowledge that there are these infringing websites that exist. And you get a sort of proactive court order so that the minute these websites go live, the ISPs are then asked to block them before the broadcast starts or while the broadcast is in place.

So the value and the broadcast is preserved. And that has had a major impact in the sporting sphere in terms of getting illegal streams off the air when it matters. Because anyone who looks at the illegal streams sometimes in the middle of the stream and then it just cuts randomly. Or you're five minutes in and it just cuts. It's because of that live injunction taking place. But again, what we rarely see happening here is that this is limited to your, again, coming back to the answer in the second question, those developed countries or those countries that have an understanding of the value of sports and have taken the proactive step to allow these sorts of legal developments to take place.

We don't see the live injunction happening in places like Trinidad and in Commonwealth Caribbean, but across the EU, you're seeing it happening. I think in the US, you're increasingly seeing it happening as well because again, they're preserving the value in the live broadcast. And this has extended beyond sports now because it also extends to things like live award shows that are quite popular on the pirate streams as well. So when you have the Grammys and other event shows like that, as well as just other national significant, live audience, live performances and things like that, that are being broadcasted on cable television. They're also using this mechanism now. So sports has really pioneered a direct reaction to the technological issues of the digital environment. And I think this is something that all countries need to really consider if we want to preserve the value of sports.

Jason Haynes

And just to fully endorse Justin's sentiments there and to reflect also beyond the role of courts as to the role of alternative dispute resolution mechanisms and in particular, arbitration and indeed mediation in resolving many of these issues in a faster way than perhaps traditional court litigation allows.

The first court proceedings by their very nature are lengthy and in circumstances where two competing broadcasters, for example, require the resolution of their dispute within a very short period of time, it necessarily means that they might be more inclined to use arbitration for finality purposes or indeed mediation to have some of these issues resolved.

Mediation and indeed arbitration are confidential procedures and so the prospect of a ruling coming out and potentially injuring the relationship between the parties in question in future might very well be ameliorated in those circumstances. And then there's something to be said also about mediation and arbitration rules, particularly at the WIPO Arbitration and Mediation Center, which allow for expedited arbitration in particular, whereby those matters can be resolved in very short order, in fact, a matter of days, if not hours, by highly skilled experts in the field. And this, of course, allows for a degree of specialization in terms of the resolution of these disputes.

Part of the challenge, of course, again, with court proceedings is that many of the judges in many jurisdictions don't have specialized IP expertise. Many of them base their IP rulings on what they might have heard here or there and they're not grounded in a theoretical interest that are at stake and indeed a practical commercial interest that are at stake. So resolving some of these issues particularly around broadcast infringements via arbitration and mediation is incredibly helpful from an enforcement perspective.

Of course there are challenges in the sense that, of course, you require an arbitration agreement as the basis upon which you referred the matter to arbitration in the first instance. And in some instances, depending upon how complex the matter is, it might very well be costly, in fact, more costly than litigating these matters before court. So it is not to suggest that it is a panacea to the challenge of enforcement, but it does add in terms of the greater ecosystem of enforcement mechanisms to what Justin has rightly described as the court's increasingly interventionist approach in terms of injunctions as an example.

Lise McLeod

Thanks to you both. Chapter two discusses the growing importance of personality rights for athletes. How have these rights influenced the way athlete contracts are structured?

Jason Haynes

So in the past, there had been almost an implicit assumption that athletes were owned by their teams or their clubs or their leagues, as the case may be, and that they themselves did not possess any inherent value. Now, with litigation over time, certainly coming out of the United States, that perception has changed significantly over the years.

Beginning in the 1950s, 60s, the courts in the United States became increasingly interventionist and recognized not simply a right to privacy of athletes in particular, but that they were entitled to the right to publicity. And the right to publicity effectively meant that athletes themselves could exercise jurisdiction over their likeness and their persona, their image as the case may be, and be able to monetize that.

And of course, the encouragement to that is that they were able to prevent others from being able to exercise those exclusive rights. And so we've increasingly in the last two decades or so, seen contracts becoming a lot more modernized in the sense that they're more reflective of what I would say is perhaps a more balanced or equal bargaining position between teams on the one hand or leagues on the one hand and athletes on the other.

Athletes increasingly know what their worth is, their persona now can in fact be valued and so they can have a good sense of the value of their goodwill in terms of the monetary value associated therewith and of course that can be reflected in their contracts with clubs and teams and of course it means therefore that unless of course they give a license to the club or team in question the effective use of their persona, the club or team in question will be prevented from using said images or aspects of their persona.

So we've seen a very dynamic change happening in recent years in that regard. I think, of course, it is a positive development. In fact, in Emma's chapter, she was very clear that over the years, what we have seen with that shift is that in fact, athletes are making a lot more money outside of the formal context of this sporting discipline within which they participate by simply monetizing their IP portfolio and in particular, their personality rights. So this is, of course, an incredibly wonderful development because it means that athletes who are exceptional and who are well-recognized can indeed benefit from the fruits of their labor and indeed their image and other aspects of their personality.

And this is especially important, I think, for athletes, many of whom come from very disenfranchised set of circumstances. So many of might be poor, many of them might have certain networks or connections, and many of them might not even be paid in terms of their substantive contract commensurate with their abilities and their skill set. But of course, if they're able then to on the side monetize this, this would be of tremendous benefit for them and their families and their wider communities.

Now, one of the things that comes up very clearly in Emma's analysis, which I thought was done quite brilliantly, is to look at what we've seen in recent years insofar as contracts are concerned and how they are drafted, what types of clauses are included, and the implications of those clauses. She mentions in particular the Morality Clause, which essentially provides that if an athlete does something that brings the sport into disrepute or indeed the team that they represented or the league, then that may in fact give the league or team in question jurisdiction then to terminate the arrangement whether it's a sponsorship arrangement, or what have you, with the player in question on account of the fact that they're losing.

I mean it's all about the money right so if commercialization is at the core, the center of this enterprise. And they're going to lose or potentially have lost as a result of, you you're smoking marijuana publicly or you're engaging in anti-Semitic remarks on social media. It means that the dynamic has really shifted. And so in that context, leagues and teams and clubs in particular are increasingly using the morality clause to constrain athletes in many ways in terms of their behaviour and their conduct, not only on the field, but I think publicly as well. And that has implications for the extent to which they can monetize their personality rights, because in the event that they were to breach that morality clause, even if there's a pre-existing express contractual arrangement allowing for the monetization of their personality rights, that can be circumvented by the fact of the breach in question.

But increasingly what we're seeing in recent years as well is the power dynamic shifting as well. And in particular, athletes insisting that their contractual agreements with clubs, with leagues reflect as well their own values, their own interests, and of course, recognizing the inherent magnitude of the goodwill that they have in their personality rights.

And so we are seeing reverse morality clauses being included in many of these contracts as well, essentially providing that if the club or league were to do something that is inconsistent with the value or values or the ethos of the athlete in question, then in those circumstances, they may appropriately respond, the athlete that is, by terminating that arrangement.

And so, it's a fascinating time to view this development in personality rights because we're seeing changing power dynamics at play, something which 20 years ago one might not have imagined because at that point it was very much the case that clubs and leagues were kings essentially, but now that dynamic is changing as well. And increasingly also, we're seeing jurisdictions, enacting very much a sui generis legislation on this issue of personality rights. And I think it's a fantastic development because it means therefore that you're not depending on the courts as such alone for enforcement and recognition of the right in question, but you're also relying on the legislative intervention.

And part of the challenge, of course, with relying on the courts is that in some jurisdictions, courts haven't quite recognized a sui generis area as such called image rights protection. They may in fact rely on other areas or cognitive areas such as passing off as such, which of course require a degree of misrepresentation and oftentimes that is not present to establish the cause of action. And so, in the United Kingdom, for example, where you might imagine things might have developed considerably in the light of the number of personalities in this jurisdiction, they very much are still reliant on very archaic structures such as passing off. Whereas in other jurisdictions, we've seen the right to publicity develop in the United States in particular. And I think, of course, that that is a positive development in this field.

Lise McLeod

OK, Justin, chapter three emphasizes the importance of live sports broadcasting to the industry. How sustainable is the current broadcasting model given ongoing technological developments and the changing patterns of content consumption?

Justin Koo

So I think this is probably the biggest question in the sports business model, right? Live broadcasting is the cornerstone of commercialization for sports. This is where the vast majority or the bulk of the money that a sporting enterprise can make comes from. So, whether you're the league, whether you're a team, your budget is rarely tied to how successful your broadcasting model is.

So the biggest leagues in the world, let's say the Premier League being the biggest or one of the biggest, we're talking billions of dollars in play or billions of pounds in play for the broadcasting rights. Your biggest leagues in the US, the NFL, the NBA, et cetera, again, the biggest portion of their earnings or their revenue comes from their live broadcasting rights. So that is really what is most essential in the IP portfolio.

And yet at the same time it is the most fragile in terms of its protection. Again, because of the ease in which broadcast piracy can take place. So you have the live broadcast taking place on cable television, whether it's through pay-per-view or it's through your cable subscription. A lot of leagues are now shifting or considering shifting towards on-demand access, so via streaming platforms. So you don't have to have a cable subscription. I think that's where the latter part of this question really is affecting the business model.

Not everyone wants to pay for cable subscription to get access to their favorite sporting events. And this is where I guess the market will take over. And if the market cannot provide a cost-effective or an accessible version of access to your favorite sport, people are inevitably going to lean towards piracy, which is what we see in particular in developing countries and least developed countries where in some instances access is just not available because those markets may have been deemed uneconomical by the broadcaster for the league or by just not having access in general.

And then in other instances, there is access, but it is at a cost prohibitive price. So I think we have to strike the right balance here. And this is from the perspective of the leagues, from the teams, et cetera, in determining what's the value that we want to derive from the broadcast. And are we able to have let's say brand differentiation in a way that allows cheaper access in certain markets. And those markets that can pay more money, you really sort of leverage there and get more money from those bigger markets. I think coming back to the live injunction, this is where the live injunction is so key because again, the value is at the time the broadcast is live and when it's actually occurring. If you lose the value there, there's no recouping the value for that much that is gone or that incident that is gone.

So yeah, and you could only ever try to capture it after the fact, which doesn't work. So I think technology is making a significant impact on the policing and the enforcement of intellectual property rights. And that's something that, you know, countries will have to become greater or have greater awareness about if they want to grow their domestic leagues and things like that. So they have to embrace a broadcasting model that's going to work for their particular enterprise.

Not every league is going to be the Premier League, not every league is going to be the World Cup, not every league is going to be the NFL. So the value inherent is going to be very different. I think this is where the business side of sporting decisions needs to be more carefully thought out. Charging an annual rate for a league that is not the Premier League may not be effective. So it might be that you have to charge a much smaller fee on a on demand, pay-per-view access sort of basis. You charge a dollar for access to the game or something like that. Not everyone is going to be willing to pay a hundred and something US dollars for an annual subscription.

In some countries, you might have internet access issues, or you might not have access to a particular cable provider. For example, let's say ESPN that carries a lot of these games, or you have now actually competition in the market space. So you have ESPN, you have the Zone, you have Peacock in the US. So you have a lot of different entities that are carrying these broadcasts and a much greater choice now than we had in the 90s and the early 2000s. But I think the way that the market space is going, I think there is a need for greater competition. And this is where the companies like Amazon are starting to get into the game and providing one off access to particular games and things like that.

So it's going to be a price competition at the end of the day. But I think the leagues do need to accept that the business model is changing despite the fact that broadcasts will still be the centerpiece of their intellectual property portfolio, but they have to accept that technology changing means that their business model also has to evolve. And without that, they are going to get left behind. And if they don't offer accessible and affordable content, piracy will continue to reign. There's no getting rid of piracy. I think that's the bottom line.

Lise McLeod

In Chapter 4, branding is examined through a broad IP lens, including newer elements such as domain names and digital content. How do you see sport branding strategies adapting to technological changes, including artificial intelligence, if I may?

Jason Haynes

Yeah, I mean, as we know, technological developments have spiraled in the last few years, in particular, last five years or so with the coming on stream of a range of AI related products. We know, course, of ChatGPT. We know of Claude, among others. And while, of course, they gave a certain degree of leverage to companies themselves, including sporting organizations to use these facilities to their advantage in creating that branding that is fit for purpose and meet their particular requirements. They also pose almost existential threats to, for example, the guarantee of origin of a particular trademark as the case may be.

Now, part of the challenge with these platforms and tools is that they often rely on, at least their training data, multiple forces to construct at the very end a particular sign as an example. And in this regard, it may very well be that they're relying almost inherently in so far as their training data is concerned with the logos and other indicia that represent or guarantee the origin of a particular clubbing question and its IP portfolio. And it would construct something that does not look the same as what's in the prior art, but has a general feel or gives an overall impression that is similar to as such.

And a difficulty for these entities as such is to then be able to demonstrate when of course they bring infringement proceedings that looked at from sort of a qualitative and indeed quantitative perspective, these two signs are the same or confusingly similar. I imagine that if the prompt used is sufficiently nuanced, the person who is given the prompt can I suppose instruct the AI device to create a sign that is not necessarily confusingly similar on first look, but nonetheless, which bears a certain resemblance, a certain, I don't know how to describe it, gravitas as an existing sign. And so in that context, it’s going to prove very difficult, I think, for sporting clubs and organizations and so forth to be able to establish the requirements for infringement as such.

But beyond the digital realm, a lot of conversation has been had recently around the show of support and loyalty to clubs. Because on the one hand, as a club, you want to engender a sense of loyalty, a sense of support, a sense of community among your fans. But on the other hand, you also equally want to protect the IP rights associated with your company, whether that's your logos or other indicia of your company as such, because of course these things are inherently valuable because they have goodwill attached to them and they're a guarantee of origin.

The challenge, of course, then would be, now, at what point do you intervene when, for example, you are witnessing persons at stalls that are selling fake t-shirts or other paraphernalia that contain either the identical logo that you're using or indeed one that is confusingly similar. In these circumstances, courts have intimated that the argument around loyalty and support would not be a definitive defense as such in that regard. And I think that's, of course, a positive development because it then reifies the fact that the brand is central, in the course of trade, right? So you're benefiting financially and your benefiting financially means that that is being taken away from the monetization that could otherwise have happened had it been exclusively in respect of the owner of the IP portfolio in that context.

And so that interesting dynamic is at play. And I don't know necessarily if, certainly in other jurisdictions where, you know, clubs and teams and leagues are very much less inclined to police compared to, for example, an Arsenal or Manchester United, that there is this sense that let's hold these infringers to account. There's a sense that, okay, well, it is what it is. Let's just let it be. But as I said, I mean, as I think Justin has said, in other contexts, in the UK in particular, and in other more developed jurisdictions, there is much more force, I think, in terms of combating these practices.

On the related point of domain name or cybersquatting, we've seen an explosion of it happening in recent years. And again, in as much as the attempt is to prevent any use of a sign that may implicitly suggest some association. And inasmuch as the law is very clear that if indeed the domain names are similar or identical or confusingly similar, that there might very well be liability if indeed it's done in bad faith, we still have this challenge that is evolving and that is a mounting challenge in that regard. And in fact it's gotten so bad that some surreptitious companies in addition to using the names, the cyber names of sporting organizations, sporting clubs or leagues as the case may be, they were then demanding as a condition for taking down the name or removing themselves from being associated with the name that they be paid significant sums of money.

And so you have this tension whereby, yes, of course, you want to on the one hand respect the fact that, you don't want to monopolize the entire internet by virtue of registering, you know, multiple domain names for a particular event, let's say Qatar 2022, but at same time, you want to ensure that consumers, the ones who are clicking are not invariably confused by the fact that they draw a false association with respect to the two corporations or companies in question.

And so that tension continues to be at play. It's even gotten worse, as I think, suppose, Natalie Corthesy has described, in another context, regarding the use of country names as almost implicitly create an association. She's used the example of, you know, Jamaica sort of being co-opted by surreptitious entities and then monetizing and commercializing the country name for their advantage. And part of the challenge which she ended defies is that because IP rights in particular are very much territorial by and large, while there may be protection in a Jamaican context, outside of Jamaica, the protection of country names may not form part of the legislative agenda of other jurisdictions and so it may not necessarily lead to enforcement in those jurisdictions. And so I think it's a very interesting space to be at the moment whereby companies and sporting bodies in particular are very much concerned about the integrity of their brands, but more and more we're seeing surreptitious entities coming up with more nuanced and innovative means, including with the use of technology to circumvent the guarantee of origin as such.

Lise McLeod

Expanding beyond brands, Chapter 5 explores the role of patents, trade secrets, and industrial designs in sport. How significant are these forms of IP in shaping both performance innovation and commercial success?

Jason Haynes

Yes, well, all three, I think, are incredibly important for shaping innovation and success. Indeed, if there weren't protection from patent law, or indeed industrial designs law, or the law on confidentiality, it may very well be that there would be no incentive to engage in research and development to procure these types of developments which are needed to advance sport. And so it's almost implicit, I think and indispensable for the continued commercialization and just the continued existence of sport by its very nature to have those protections in place because without them, we're not going to have any incentives for innovation or creation as the case may be.

I think just kind of beginning with confidential information. Part of the challenge is that in most jurisdictions, there's very heavy reliance upon common law causes of action in order to protect confidential information in this important context. And that has proven to be incredibly helpful in some respects, in the sense that once the information is such that it has the necessary quality of confidence in the sense that it has not been previously disclosed, and it has been appropriated and used without permission or consent, then in those circumstances, it may give rise to a cause of action in breach of confidence, at least in common law jurisdictions.

But of course, we have the challenge of artificial intelligence and the fact that increasingly confidential information is being uploaded onto these AI platforms and then subsequently being accessed, probably not in the identical form, but certainly in some form as that which was previously uploaded. And the question ultimately is, in those circumstances, who bears liability? Is it the person giving the prompt or is it the AI company that is facilitating the infringement in question?

There hasn't been very much by way of litigation in this regard, but it does raise some very interesting questions as to liability and whether or not the AI companies in that context are simply acting in a mutual position with respect to the confidential information. This is especially important, I think, in the context of sports where trade secrets are of utmost importance, such as Formula One. And of course, we've had several instances in the recent past, including, for example, the Spygate incident in which we've had employees moving from one entity onto the next, carrying with them very important trade secrets and then using that to the advantage of their subsequent employer and that then giving rise to considerable concerns as to anti-competitive conduct in that regard. So unfortunately, we haven't seen litigation arising there from.

But what I can say is that it is a challenge that needs to be appropriately continenced in contemporary IP and sport as the relationship goes. Now, the United States has gone even as far as treating certain forms of confidential information, in particular trade secrets, as being a property right as such, compared to other common law jurisdictions such as the UK, which doesn't recognize in principle the confidential information in and of itself as property. So the United States in that respect is ahead of many other jurisdictions and in fact they have gone on to pass binding legislation, the Economic Espionage Act, which provides for criminal penalties in circumstances where trade secrets have been appropriated and used without appropriate permissions.

The question obviously for all consideration is to what extent should other jurisdictions move in that direction and in any event whether and the extent to which there's a willingness to make it even a strict liability event so that once you access confidential information even without knowledge of same and put it to use then to the extent that it harms a league or club as the case may be that is sufficient to establish that there is a breach in question.

I'm not sure if we'd ever get there, but there's certainly conversations that are happening along those lines as we speak. Insofar as patent protection, I think it goes without saying that without inventions in the sporting disciplines, we would not have certain sports as they are now. I mean, many sports highly depend upon patented material, patented subject matter. So if you think of certain balls that are used in various sports, certain helmets that are used, the bicycle equipment, among other things, many of them highly rely upon patented subject matter. And of course, that's where the relationship between confidential information and patent becomes relatively complex.

Because in one sense, you may want as a patentee to see how your product is operationalized in practice. But then in disclosing it, for example, an exhibition game, you may very well then expose it to being now part of the prior art. And if it is part of the prior art and then you want to subsequently register it, the registering authority might very well say, well, actually, it's not novel as such because it's already in the public sphere. So there are some challenges there in that regard in terms of ensuring that novelty is maintained and respected in that context.

What has been particularly interesting recently, and there's been some discussion about it, is around second medical usages and patents, in particular for supplements that have been created or medicines that have been created for particular purposes, such as diabetes. And then you realize that, well, these can actually be utilized in the context of sport to enhance performance. And it may very well be that the entity in question can seek patent protection in respect of the second medical use because it is substantially and qualitatively different from the prior art as such. Of course, these matters have not come before the courts just yet, but it does raise a point for consideration in our discourse.

And then finally, in terms of industrial designs, we know, of course, that people are not attracted to things just because of their inherent technical function, but also because how they're presented, in other words, their appearance. And so industrial designs then provide, insofar as the legal framework is concerned, appropriate protection to manufacturers to ensure that if a helmet is manufactured using a particular appearance, if a ball or bat or whatever it is, is manufactured as such with a particular nuanced appearance that gives a different overall impression to what the prior art is, then that is appropriately protected. And so that's of course a positive development. And I think just in closing, the one thing I want to make clear in that context is that all three of these portfolios operate cohesively together oftentimes.

You can indeed have a patent for the technical function of a particular product in question in sport and indeed appearance is subject to designer protection and the underlying research and development analytics is subject to confidential information and protection. And so these are synergistic in nature and so the whole point of the chapter essentially was to give context to how the operational lasers are in practice.

Lise McLeod

I don't know if at this point we fold in the discussion on ambush marketing and how it highlights the differences in legal approaches across jurisdictions. What factors should policymakers consider when designing effective regulatory frameworks in this area?

Justin Koo

Before starting to answer this question, I just want to give a special shout out to the author of this chapter, my colleague Tyrone Marcus. He is really the one that got me into sports law. I've been an IP academic by training and Tyrone is the one who really brought me into the sports law fold. As an avid sportsman, I love to marry the IP with the sports and this was really, you know, a passion project with the book. So thanks to Jason for reaching out to me and, you know, starting this whole process. This has really been super enjoyable.

And in answering this question, I think ambush marketing is really one of the most awkward areas of law that I have encountered because of the way that the different competing interests are attempted to be balanced. And I say attempted to be balanced because in my opinion, and I think this is something that comes out in Tyrone's chapter, the sort of funny legislative approaches that we see in relation to ambush marketing, either at the domestic national levels or in the charters of sporting organization. So I want to start by talking about the sort of evolution of rule 14, the Olympic charter to begin with, because that's kind of one of the go-to aspects of looking at ambush marketing. Initially, the Olympics was very, very heavy in terms of if you are not an official sponsor of the Olympics, you cannot associate with the athletes that are in the competition. And this was very, very unpopular for a very long time. And I guess with the, changes in times, changes in social norms, changes in technology that sort of pushed that very harsh approach to rule 40 out of the window because brands like let's say Nike, Adidas, et cetera, that may not have been the official sponsor of the Olympics were arguing. We're the ones who sponsored these athletes to get to this point. And you are reaping all the benefits of that and keeping us out of the equation. So this is very unfair.

So rule 40 has been relaxed so that the sponsors can associate or continue to associate with the athlete during the games, but in a very limited way where they're not allowed to make connections with the Olympics and the medals and certain specific insignia, which brings back the value of the trademarks for the Olympics and other events like the FIFA World Cup, et cetera. But I think looking at that from that perspective, you can understand that the Olympics and other sports company bodies want to protect the integrity of their brand on the one side, but they also want to ensure that they can continue to obtain sponsorship. Because if I'm going to give you 40, $50 million to be an official sponsor or $200 million to be an official sponsor for this event, I want a certain sense of exclusivity. And if other brands are able to sort of free ride on the coattails of that by continuing to back athletes for significantly smaller sums of money, that's not a good investment from my perspective. So that's that one aspect of it.

On the flip side, what we're seeing as well is that these sports governing bodies at the international level are mandating that in order for a host country to get the contract signed, you have to introduce legislation at the domestic level. So whether we're talking about the cricket World Cup in the Caribbean in 2007, we're talking about various games in Australia, we have the World Cup coming up in the US, there would be certain agreements that need to be put in place to say that we're going to ensure that the ambush marketing elements of our charters, frameworks, policies, et cetera, are protected by law. So it brings in trademark law in a sense, but then it goes way beyond that. And I kind of think about it like a super trademark perspective where you're granting control to a third party over, let's call them, fourth party rights to dictate who can't market in relation to your games, as well as you're giving it specific legal protection.

Often this takes the form of sunset legislation where there's a blackout period that it goes into place some days or some weeks before the event and closes some days or some weeks after the event. And in that period of time, unless the organizing body sanctions your use of your branding with this, you're not allowed to do it. And the legislation looks kind of like trademark law in a sense, but it's relatively sui generous legislation and it often is very, very strict.

So the reason I say it's awkward is because the scope of protection is not necessarily always justifiable from a third party perspective because you're granting one entity control over an entire country's jurisdiction to control the use of brands, even though you may have a registered trademark in that country. So the competing interests, I think, have a very strong say in arguing that this grants too much power in relation to brands that are going to be here for a short space of time and then disappear after the fact. So it is awkward in that sense. I think the elemental aspect of it that we need to pay some attention to is the way in which legislation is actually provided for. So often these legislations go into the parliament and they just get passed at will with no major discussion because it's a condition of the games being granted to that particular country, in that particular year.

And then the implications are quite significant. So in the Caribbean for 2007, Cricket World Cup, the official provider of snacks, for example, was able to exclude some very well-known sources, providers of snacks that would be often at the cricket games. They were excluded from being at the games in a total sense. So you had cultural elements of Caribbean cricket being sacrificed in exchange for their so-called big brands taking the forefront during the games.

So there's a real impact on the average person. There's a real impact in local brands. So I think the relationship between ambush marketing is important, but I think our balance needs to be struck between the level of control that is granted to a third party to control all other brands that associate with the games, alongside the need to ensure that your local brands that pre-exist the games are also able to function. I think that's one of the real challenges with ambush marketing. I think Tyrone really does a great job in trying to flesh out some of these conflicting interests, some of these awkward situations and really reinforce. And the fact that, brands are important, but I think the balance really needs to be struck in a way that makes sense for all the parties involved.

So Australia has been very good in terms of having standing legislation for ambush marketing so that it's not our games is happening this year, our event is happening this year and we have to pass new legislation all the time. They've set up legislation to be able to facilitate that on an ongoing rate, whereas the Caribbean introduced sunset legislation. And of course, legislating in the Caribbean is quite challenging for Caribbean wide games because it's legislation in each individual country. There's no regional legislation. So it can be difficult for smaller countries. But again, as you know, just reiterating, brands are important, but striking the right balance I think is more important. I think that's really what this chapter was about.

Lise McLeod

Thank you. In wrapping up our discussion, the book concludes by underlining the impact of emerging technologies on IP and sport. And in your view, what are the key priorities for legal development in this space over the coming years?

Justin Koo

So I think going forward, it's the case that sport entities, whether it's at the international governing body or right down to the grassroots teams, they need to become more aware of intellectual property rights. While that is already the case for your big entities like FIFA, like the ICC, like the Olympics. I think for some of the other international governing bodies, the brand approach needs to be a bit stronger, like they need to understand the value inherent in their brands and this is particularly important at the national governing body levels. Especially for youth sports and things like that, intellectual property is not just for the big boys, it's not just for the big girls in the sports. It's not just for you you're know, you you're Chelsea's and you're Real Madrid’s it's also for your grassroots football teams your grassroots cricket teams, etc.

Understanding the value of IP, understanding what IP is about, I think is really the starting point. There needs to be a much greater push to educate persons involved in sports. So from the sports administrators right down to the athletes themselves, the coaches, the managers, everyone. I think that's the first bit. I think the second bit is that everyone has to understand that the world is changing. Technology is creeping into sports in a lot of different ways, not just in the materials that equipment is being made with.

Not just with the broadcasting, but just in a general sense, how we interact with one another. So, the impact of social media and things like that, appreciating that IP technology has an impact on the actual operation of the sport itself. That's very key. And I think understanding that the overlap or the interlap of these two affects your business model is very, very important and that we need to focus on building sustainable development in sports, and IP has a really crucial role to play there. So everyone understanding their role and understanding what rights they have from an IP perspective is really critical to developing sport and ensuring the continued success of sport. And without IP, there's no sport in the way that we know it today. “Megasport” in inverted commas, does not exist without intellectual property rights.

Jason Haynes

Yeah, I mean, just to endorse everything that Justin has so eloquently put and just to add that I think in some jurisdictions that legislative intervention is absolutely necessary. There are many jurisdictions that don't have modernized legal frameworks to deal with the challenges that arise in our contemporary context. Justin talked about ambush marketing in the context of Tyrone's chapter and he mentioned that for some jurisdictions that have hosting rights, you would only see legislative intervention just before these events are hosted and they terminate immediately after the events conclude.

What one needs to consider potentially, legislatively at least, is the potential of having model legislation on this particular issue such that it could be adapted to other jurisdictions that may not necessarily have the expertise to be able to deal with the issues that arise, particularly developing countries as such, when they're hosting these types of events. There's something to be said again, also about the relationship between artificial intelligence and the lightness and or the confusingly similar nature of the outputs that are created.

And in particular, while of course it may have less an impact on bigger corporations, bigger companies, bigger sports organizations that are able to observe the association, that might not be so for athletes who are very much heavily dependent upon their image, their likeness for monetization. The impact of having videos that replicate essentially the image of these athletes or even photos, needs to be something that I think needs to be considered very carefully given of course that unlike bigger corporations, athletes may have very little by way of battling in power but also litigation potential to be able to challenge these types of outputs.

And then of course there's something to be said about social media and regulating aspects of social media in particular where that content is being used by these so-called social media influencers, they are monetizing and the question arises then as to what extent are they then engaging in the use of copyright material, for example, in the course of trade? And if they are, to what extent that they should be discouraged or some of the profits or at least some of the profits associated with the use on social media and TikTok and so forth, where they can generate millions of views on a daily basis of these copyright materials as such.

And then, course, you know, Carissa in her chapter talked very poignantly about the challenges from a computational perspective of territorial licensing and geo-blocking. And of course, we know that there is an ongoing tension, particularly around the communication to the public and indeed the question as to whether or not it's appropriate or indeed lawful to use decoders to circumvent essentially the territorial restrictions imposed by broadcasting companies. Of course, there's been jurisprudence fairly recently from the Code of Justice of the European Union which has clarified the right to communication to the public which of course Justin has dealt with quite extensively.

But I think in other jurisdictions which haven't had such firm pronouncements by the judiciary as such, there might be need for some degree of least legislative contemplation or consideration of what the implications are, since for example IPTV mechanisms have become very prominent in many jurisdictions as well as indeed decoders as such. So I think these are all contemporary issues that necessarily need to be appropriately addressed going forward.

Lise McLeod

Justin, Jason, thank you very much for your time and for sharing the different, very important elements of intellectual property law and sports shared and compiled in your book of the same name.

I would like to encourage all the listeners of Page Points to dive into the different parts that I'm sure will heighten their studies or even their general interests.

So thank you for joining us today.

Jason Haynes

Thank you very much indeed, it has been my pleasure.

Justin Koo

Thanks for having us, this was great fun.