The commercialisation of sport has grown exponentially over the last 10 years and the power and exploitation of merchandising within the world of football (or ‘soccer’ as it is known in the US) has typically been synonymous with sports companies, brands, teams and players.
Although it may not be surprising to most, the best managers and coaches at football clubs are able to monetise their own image and build their brand, becoming an asset to teams even beyond their work on the field of play. In this article, Commercial Solicitor Mohit Pasricha analyses a recent dispute over personal branding, identifying the key legal issues to look out for when managing the intellectual property of individuals in the sporting world.
Whilst the majority of situations tend to be relatively straightforward, the recent appointment of Jose Mourinho (“Mourinho”) at Manchester United Football Club (“MUFC”) highlighted a particularly unique and unusual scenario. The day before Mourinho’s formal announcement as the new MUFC manager, reports surfaced that Mourinho’s old club, Chelsea FC (“CFC”), still owned part of Mourinho’s trademark portfolio (despite Mourinho being sacked by CFC in December 2015).
By way of some background, and following Mourinho’s first spell at CFC in 2004, CFC registered the EU word mark “Mourinho” in 2005 under a wide variety of goods. This included many different products from the expected (computer games, sportswear, football boots) to the unusual (holograms, napkin-holders, lingerie). Whilst Mourinho still retained the right to his own name, it effectively gave CFC the power to monetise the “Mourinho” name or image on certain goods, building upon his growing global profile. The unusual aspect was that CFC, as opposed to Mourinho, owned the EU trademark and in turn a highly valuable asset. This continued to be the case even after Mourinho left CFC in 2013, and it was inevitable that a problem would arise if a future employer of Mourinho wished to use Mourinho’s name commercially.
MUFC were one of the first football teams in England to register a trademark, and last year saw them being crowned the most valuable football brand in the world at $1.2bn. The jump from third to first place was primarily due to their highly lucrative £750m kit sponsorship deal with Adidas. It is clear, especially in consideration of MUFC’s listing on the New York Stock Exchange that the pursuance of a successful commercial strategy remains of paramount importance. Accordingly, continued commercial success undoubtedly relies upon MUFC’s ability to monetise, maintain and protect their brand. However, their desire to appoint Mourinho and utilise his name on commercial products hit a brick wall as they would require the permission of CFC, otherwise they risked infringing CFC’s registered trademark.
In this situation, MUFC only had four primary options:
3. Challenge CFC’s trademark registrations on the grounds of invalidity;
4. Sacrifice commercial revenue streams by not selling Mourinho merchandise and thereby not infringing CFC’s trademark registrations.
However, following the subsequent appointment of Mourinho it is clear that MUFC either obtained an assignment of CFC’s trademark registrations or alternatively they paid CFC a fee (probably multi-million pound). In light of MUFC’s commercial strategy (and success) to date, it would have been inconceivable for MUFC to not sell Mourinho inspired merchandise, and undoubtedly this unusual situation would have cost MUFC a significant sum to resolve.
This scenario sheds light upon the negotiations involved by Mourinho’s legal representatives when leaving CFC after his first spell in 2007. A manager or player in this situation should not have relinquished control of his trademarks to a club which may continue to monetise or use them after they have parted ways. The situation encountered by Mourinho highlights the importance of considering all relevant intellectual property rights in the instance there is termination or severance discussions.
Ultimately, the sporting world is an exceptionally lucrative commercial opportunity. The reality is that the power of merchandising and building a brand has extended to instances where US college football players seek to trademark not only their names but also nicknames and fan slogans. Consequently, strong and effective brand protection must be in place to ensure intellectual property rights sufficiently enhance and identify the brands they seek to identify with.