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What’s Hidden in the New NCAA Athlete Endorsement Rules? Intellectual Property Considerations

Published: August 5th, 2021

By: David P. Hathaway

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A new world in college athletics opened up on July 1 when a Florida law went into effect that allows student-athletes to accept payment for the use of their name, image or likeness. On the same day, the National Collegiate Athletic Association (NCAA), the governing body for college athletics, announced it was suspending its rules barring athletes from participating in such financial relationships. Pizza restaurants, car dealerships, gyms, hair salons and many other businesses will soon tout endorsements by college athletes. The ink on the new law was barely dry when a Miami gym owner offered to pay everyone on the University of Miami’s football team $500 a month to promote his business on social media, according to ESPN.

Recognizing the immense interest in this opportunity for businesses and athletes, Dean Mead has formed a cross-discipline team to advise on how to navigate relationships that until recently would have violated NCAA rules and merited substantial sanctions for schools and athletes. We have brought together a team that advises on contracts, financial management, disputes and – an angle many may not have top of mind – intellectual property.

Other states have passed legislation that allows student-athletes to profit from their endorsements of products or services, and more are expected to join them, lest their sports teams get left behind in what surely will be an unofficial recruiting perk. States will vary in how they shape these laws, but all will tell universities it’s mostly hands-off when it comes to restricting athletes’ sale of their names or images.

As the Florida statute says, “A postsecondary educational institution may not adopt or maintain a contract, rule, regulation, standard, or other requirement that prevents or unduly restricts an intercollegiate athlete from earning compensation for the use of her or his name, image, or likeness.”

Supreme Court set change in motion

These laws follow the U.S. Supreme Court ruling in June that the NCAA cannot place limits on education-related compensation to athletes. Although the ruling did not address student-athletes’ ability to sell their name or likeness, most read the decision, based on antitrust law, as the first step in dismantling the NCAA’s ironclad authority over money given to athletes. The NCAA quickly revised its rules following the Supreme Court decision, allowing almost complete freedom for athletes to sell their name and likeness.

There are many issues that will have to be sorted out, and one area that has received less attention is the IP concerns of businesses and athletes. While some high-profile athletes will win lucrative deals from national brands, we expect most of the activity in this new promotional sector will be with small and mid-sized businesses, and with athletes whose fleeting, local fame among a fanbase may never rise to national status. Restaurants and local stores may be the biggest buyers for college athlete endorsements, and these businesses may not have as much exposure to the complexities of IP law.

The following best practices won’t negate the need for professional IP advice, but they will provide a foundation for your discussions with an IP lawyer if you are contemplating securing an endorsement from a college athlete.

Social media will rule. Expect athletes to use their social media platforms as commercial influencers. Many already have social media platforms that are primed for commercial content. University of Florida wide receiver Jacob Copeland has the Gators’ largest social media following with more than 88,000 followers on Instagram and Twitter, and the ceiling for many athletes will be much higher. Olivia Dunne, an LSU gymnast, has more than 5 million followers. If an athlete posts a video with a prominently placed product or an outright endorsement on social media, does the business that paid for it have IP rights? There are a lot of “it depends” answers to such questions; be sure to address this in contracts and get legal advice.

Surnames might not win trademark protection. A “Tebow Burger” would have won customers during the popular Florida quarterback’s reign, but trademark authorities often look askance at surname-connected products. If you are advised a surname can win protection, you will want to look at who owns it – the business or the athlete.

Trademarks must be unique to win protection. The best names are those that use “fanciful” or made-up words. “Google” is a good example of a created word that is bulletproof from challenges. Descriptive terms such as the “Gator D-line Steak,” which might be inspired by a football team’s stout defensive line, might have a lower probability of securing trademark protection.

Get professional search help before using a trademark. It’s surprising how many times businesses come up with a trademark thought to be unique, only to find it’s already in use by another business. This is an area where only amateurs rely on an internet search. Professional searchers look at state databases of trademarks and business names, federal trademark registrations, trade journals and other sources unfamiliar to lay people. Even big businesses and high-profile celebrities with expensive advisers can move too quickly on a name. In 2019, Tom Brady’s business advisers filed a trademark application for “Tom Terrific,” only to be embarrassed when the Mets’ fanbase was quick to point out the moniker had long been associated with Hall of Fame pitcher Tom Seaver. A simple internet search might have turned up Seaver and the 1950s cartoon character of the same name. (For the record, Brady said he didn’t like the “Tom Terrific” nickname.) Don’t use or invest in a trademark, whether or not it’s associated with an athlete, without receiving some assurance from a professional researcher that it is free and clear.

Have a list of alternative slogans or names if you want trademark protection. “Touchdown Charley ice cream” may or may not be protected if there is a “Charley’s ice cream” in your market. In many cases, moving a few words around won’t be enough if it could be confused with a competing product. Your business plan should have alternative names at the ready.

Be the first to file. We can’t tell you how many times we’ve seen clients find that someone got to the U.S. Patent and Trademark Office a week earlier. Generally, the party that used a mark first has priority in winning ownership but filing first is a factor in your favor for getting registered. If you file first as “intent to use,” you will leapfrog someone who actually started using it before you. The lesson here is to move as quickly as possible in filing and using your mark.

Don’t violate school marks. Colleges are aggressive in policing their own trademarks and you may not be able to use a player’s image if he or she is wearing a school jersey or helmet. Each school will have its own rules, but it’s almost certain that players and the business will have to obtain written permission before showing a player in uniform, on the football field or incorporating any logo or landmark associated with a university.

Many people see the relaxation of restrictions on college athletes’ earning power as a long overdue reform. There will be a learning curve as athletes and businesses refine the economic model, and a little legal advice on the front end should ensure that both businesses and athletes profit from this new opportunity.