April 9, 2024

Keeping a Clean Sheet: The Importance of Trademarks in Football

Insights London Market
Intangible Assets

By Ben Kemsley, Intangible Assets Underwriter

The global football (soccer) industry is a financial juggernaut, with club brand strength now one of the most valuable assets and a key contributor to any leading club’s revenue-generating ability. A club’s brand is an integral part not only of its appeal to fans and ability to attract star players, but also its overall financial strength and ability to secure sponsorship and broadcasting revenue.

Topping the brand value league at present is Manchester City FC, which currently represents the most valuable football club brand in the world, estimated at €1.5 billion by Brand Finance. The club also generated the highest revenues in 2023 of any European club.

For top teams, matchday takings now represents only a small percentage of earnings, with commercial and broadcasting income representing over 80% of average annual revenue across Europe’s top 20 clubs according to the Deloitte Football Money League.

This intense commercialisation of the football industry has amplified not only the importance of brand value, but also the need to protect it, which is where trademark rights can come into play.

A Defensive Formation Around the Brand

By registering a trademark, the owner gains exclusive rights to the mark and can then protect the exclusive usage or licensing of the mark by preventing others from marketing identical or similar products. In the world of football, Manchester United was the first English club to register a trademark in 1970 and also tops the charts, holding the largest trademark portfolio amongst clubs in world football with 677 marks, according to World Trademark Review data. This is followed by Tottenham Hotspur with 589 marks, FC Barcelona with 503 and Real Madrid with 454. 

So, what is a trademark? As defined by the World Intellectual Property Organisation (WIPO), a trademark is “a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises”. This could be, amongst other things, a symbol, word, phrase, design, colour and even sounds and smells. For example, Chelsea FC trademarked the word ‘Chelsea’ in 2016. However, in 2019, Liverpool FC’s bid to trademark the word ‘Liverpool’ in the context of products and services was rejected by the Intellectual Property Office due to the “geographical significance” of Liverpool in comparison to place names that have been trademarked by other football clubs in the U.K.

In order to register a trademark, it must be classified under the Nice Classification system. This system allows goods and services to be classified under specific purposes when the mark is registered. This classification system is often the root cause of many trademark infringement cases.

Under the Infringement Flood Lights

A large source of trademark infringement is when the use of an identical or similar mark is deemed to have caused confusion in the eyes of the public.

A current and ongoing football-related case of trademark infringement involves Manchester City and clothing company Superdry. The case has centred on a sponsorship deal between Manchester City and Asahi which saw the brewing company introduce the words ‘Super Dry’ to the team’s training kits to promote its alcohol-free beer.

In December 2023, Superdry sought an ‘injunction to restrain’ Manchester City from using this brand on its clothing because it infringed their trademark registered in Class 25 of the Nice Classification system relating to clothing, footwear and headgear. This move would require the removal of the product from sale.

The case is founded upon the core component of the U.K. Trade Marks Act 1994, which provides that evidence of infringement is found where an identical or similar mark could generate confusion among the public. This, in turn, could harm the reputation of the registered trademark.

In this case, at time of writing, it is reported that Manchester City’s legal team has called upon the U.K. High Court to dismiss the infringement claim, arguing there is no risk of brand confusion. Time will tell how this case plays out.

Other recent cases of note relating to trademark infringement include Manchester United FC’s case against Sega and Sports Interactive regarding the use of the club’s name and crest in the Football Manager video game series. Whilst the case ended in a settlement with Sega and Sports Interactive renaming ‘Manchester United’ to ‘Manchester UFC’ or ‘Man UFC’ as a ‘gesture of goodwill’, this case reinforces the importance of trademark protection as a means of maintaining brand value.   

Tackling the Costs of Infringement

The costs associated with trademark infringement can be considerable whether you are in offensive or defensive mode in the court room. As a result, specialised intellectual property (IP) insurance cover can prove a valuable asset to enterprises looking to bolster their ability to safeguard their brand.

IP insurance can provide coverage for a range of potential financial repercussions. These may include reimbursement costs to the owner of the mark arising from allegations that products, services or processes infringe their rights. Such losses would include legals costs associated with bringing or defending the case and potential resulting damages.

Gathering evidence to support an infringement case can also be a costly undertaking, particularly given the challenge of proving the use or misuse of the particular mark will result in confusion on the part of the consumer or user. The costs associated with conducting the necessary investigations can be covered by an IP policy.

It is also important to recognise the financial impact of potentially having to withdraw particular products, rebrand if required and restock with your suppliers – if this has to be carried out on a global basis, the financial burden will be significant. Once again, such costs can be covered by IP insurance.

Another increasingly relevant form of coverage in the context of infringement is business interruption. The potential ramifications of an infringement case that results in an injunction to stop the sale or import of related products can be hefty. Ensuring that cover is available for any loss of profit can be a shrewd business decision.

Power of the Brand

As the value of the sporting brand continues to grow and related sponsorship, broadcasting and marketing deals increasingly become the primary source of revenue, efforts to protect the integrity of that brand and related IP rights will no doubt escalate.

In such an environment, having access to comprehensive IP-related coverage that can respond effectively and provide financial security for the myriad costs associated with infringement cases will become a central component of any team’s risk management tactics.