Trademarks as an essential element of brand identity

We met with INTA’s CEO Etienne Sanz de Acedo during the Association’s Conference “Brands, Sports, and Esports: A Brand (R)evolution” held in Madrid, to discuss trademarks, branding in the sports & esports industry and the effects of the Covid-19 global pandemic on brands and intellectual property


What led to the organization of an event focused on sports & esports brands?

The reason is very simple – when you think about the impact of sports on society, not only the economic impact but also in terms of values, we thought it would be good for us to look at sports and, more specifically, look at sports from a branding perspective – what are the trends, the opportunities, and how are sports and esports evolving.

And considering how many major esports events are becoming even more popular than traditional sports, and that esports are getting into the Olympic Games ecosphere, we thought it would be a good opportunity to address these issues from an Intellectual Property (IP) perspective.

Although (e)sports branding is quite a niche market?

Well, it is definitely a niche market but at the same time, we must consider that we approach sports both as fans, but also as participantsAnd more and more we see the population playing esports and there are some common denominators in terms of values, so we thought that it would be a great opportunity to talk about these things and make the connections between IP and sports.

Which are the biggest challenges faced by sports and esports brands today in terms of trademark rights?

Of course, one of the major challenges is counterfeiting. Unfortunately, sport equipment and sports apparel is counterfeited prolifically and that’s a major issue.

The traditional legal issues of being able to protect rights properly and harmonization of rights is also very important. When you talk about sports, all major brands and major clubs are becoming global and they need to be protected all around the world. And so that’s another main problem they have.

Finally, I would say that good management of IP is important. As a matter of fact, in one of the Conference’s sessions, Professor José Manuel Otero Lastres, past member of Real Madrid’s Board of Directors, explained that in 2000 when the club was literally in bankruptcy he decided to change the business model – he brought the best players globally and for each and every player, 50% of the rights belonged to the Club. This practically meant that 50% of David Beckham’s image rights would belong to the Club. In other words, Real Madrid didn’t really have to pay David Beckham, one of its most iconic players – the image rights were basically the salary he was earning. He was practically playing for 6-8 seasons for Real Madrid for free! That’s about proper management of IP. When you have good management and take advantage of IP, it has significant impact on your business. Real Madrid is a great example of that.

What happens to the image rights after a player leaves the team?

It very much depends on the contract and negotiations. There are different models: In some of the cases, the image rights belong to the player, in other cases (and that’s the most frequent scenario) the image rights are shared between the player and the club. And depending how strong the club is, it can get up to 50%-50%, or even 75%-25% (in favor of the club). Normally what happens is that when the player is no longer with the club, then the image rights go back to that player.

Sports represent a set of values, which make society better. Such values are of course incorporated in the brand identity.

José Antonio Gil Celedonio (Director General, Oficina Espanola de Patentes y Marcas) mentioned in one of the panels that there were about 8.700 trademark applications in relation to classes 35, 41 and 45 of the Nice Classification – do you think that sports and esports brands are starting to understand the value of their trademarks?

I think they do, because what he said is that around 12% of the total trademark applications in Spain come from the sports industry, indicating that at least in Europe, sports are a very strong industry.

The beautiful thing is that wherever you go, there’s going to be sports. And sports represent a set of values, which make society better. Such values are of course incorporated in the brand identity. And when you think about sponsoring, why do brands want to associate themselves with sports? For example, Rafael Nadal is one the best tennis players that Spain has ever had – but the importance of Rafael Nadal is not only how good he is as a tennis player, but how respected he is as a human being. And for brands to be able to associate themselves with the image of Rafael Nadal means a lot.

Trademarks are undoubtedly one of the most important & robust intangible assets. Would you say that there is a gap between registration and the actual enforcement of rights?

I wouldn’t say there is a gap, but it is true that it is not always easy to enforce your rights and it is sometimes costly. However, it is undoubtedly an investment. If you are able to manage and protect your brand properly, then you are going to have a much better position in the market. That is the difference between big and smaller brands – it is the ability to enforce your rights in a systematic way that makes your brand grow.

A brand to a company is like a name to an individual – the same way that as a person you can’t go out there without a name, as a business you can’t go into the market without a brand. It is your identity.

Society is evolving and so is the concept of trademarks. This is why at INTA we prefer talking about “brands” rather than “trademarks”.

How can the brands tackle with the challenges introduced by technology in the protection of their TM rights?

The Internet has now existed for around 25 years and it brings not only a lot of opportunities, but also many challenges.

The opportunities: we currently have around 1.7 billion live websites. For an SME or an entrepreneur it is clearly an opportunity to be able to sell their products worldwide, which was not the case before.

The challenge is that the same opportunity exists for counterfeiters. And that makes things a little more complicated. That said, there are mechanisms that allow you to protect your rights.

For example, with regard to domain names, you have the Uniform Domain-Name Dispute-Resolution Policy (UDRP) – in order to protect your domain name, you can go into an arbitration system that should allow you to recover the domain name if you have a trademark registered and if you can show that someone has tried to register that domain name in bad faith, taking advantage of your trademark.

Furthermore, all major platforms (Amazon, Facebook, etc.) have takedown mechanisms through which brands can submit a request for the platform to take down a counterfeit good. The more popular a brand is the greater the risk of infringement. However, if a brand enforces its rights, it will gain more visibility in the market, as there is increased demand among consumers.

Throughout the past few years, we have witnessed a rise in the registration (or attempt thereof) of unconventional trademarks (such as color, three dimensional shapes, store interiors etc.). What is your view on this? Do you see it as an attempt to stretch the boundaries of TM protection?

Society is evolving and so is the concept of trademarks. This is why at INTA we prefer talking about “brands” rather than “trademarks”, because companies talk about “brands”. Trademarks are not static anymore – they are dynamic. They are moving and therefore both the Registry and the legal framework need to evolve.

We are starting to talk about data as an IP asset.  Companies more and more are looking into how to manage data properly. So perhaps data as such is not an IP right, but the management of data is an IP asset. Could we even think about going beyond that? Perhaps yes…

And let’s not forget the average consumer who is at the center of trademark law…

Exactly, trademarks help consumers to identify the origin of the goods and services. As a consumer, when you are purchasing a specific product, you see the trademark and you feel “safe” because you know where the product comes from. You know that the experience is going to be the same experience you had in the past when you were using that same product or service.

During your tenure as INTA’s CEO:

  • What do you consider as the most significant developments and changes in the field of TMs?
  • Would you say that INTA has achieved its mission to support TM rights, innovation and economic growth while fostering consumer trust?

There are several developments and challenges from a legal perspective. Harmonization is a very important one. We make trademark registration a commodity and it is easier for anyone to access trademark registration.

Another one of course is, as we discussed, counterfeiting.

“Brands also have to innovate and adapt to the immediate challenges posed by social distancing measures and economic uncertainty.”

And there’s the internet which, as we mentioned, is a great opportunity but also has its challenges.

And then we are more and more concerned by what we call “brand restrictions”. Unfortunately, we see that in some industry sectors (such as the tobacco industry) legislators are removing or trying to remove brands from the packaging of the products and services. And this is somehow related to an unfortunate situation, a growing anti-IP sentiment where, even among legislators, there is the feeling that IP, and particularly trademarks, are only for big brands. And that’s clearly a mistake, because one should never forget that in order to be a big brand you started as an SME or entrepreneur, and we’ve done studies showing that trademark-intensive industries contribute heavily to the GDP, employment and the social welfare of the different countries. There are studies conducted by the US Department of Commerce, the EU Observatory, and by INTA in Asia and Latin America, showing that on average trademark-intensive industries contribute at 30-35% of the GDPs of the different countries and 30-45% to the employment.

When I came on board, I had two clear objectives:

The geographical expansion of the Association, to gain visibility in markets where we were perhaps less present (Africa, Asia-Pacific, Latin America, and the Middle East) and I think we are definitely seeing improvements there.

And the second objective was expanding the scope of the Association from a more substantive perspective; instead of talking about just trademarks, we are more interested in talking about brands and the business side of things. And also looking into IP in a more holistic way: not just trademarks, but also designs, copyright, data protection, trade secrets, right to publicity. In other words, anything that is IP related, with the exception of patents.

And I think that in both the geographical expansion and the substantive expansion we have been successful.

The more popular a brand is the greater the risk of infringement. However, if a brand enforces its rights, it will gain more visibility in the market.

Undoubtedly the 2020 INTA Europe Conference in Madrid is a very good example of the second objective, i.e. the substantive expansion, as it adopted a business-oriented approach, allowing us lawyers to gain an insight on how the sports and esports industries operate.

What lawyers need to understand is that their role is to add value to their clients, which are the businesses and that means that as a lawyer you need to think the way your client is thinking – and that’s what we are trying to change within INTA and this is why our 2020 President has put together a presidential task force which is exactly about that: how to be an IP all-star practitioner and it’s really “thinking out of the box”, looking at business terms, always being part of the conversations and adding value to your clients.

As a result of the global outbreak of the coronavirus (COVID-19), INTA has announced that it will be holding its 2020 Annual Meeting in November in the United States, combining it with the Annual Meeting and Leadership Meeting this year. What are, in your view, the most important business & legal challenges introduced by COVID-19 to brands and IP rights?”

There are some clear practical as well as financial implications just in terms of IP filings, which we see are already down. This implies lower IP budgets for brands and less work for law firms and outside counsel.

Something also that must be addressed immediately is counterfeiting. Counterfeiters are taking advantage of this crisis and the great need globally for certain medical supplies, such as face masks and protective gear. This is putting people at risk, and brands need to work together with government to alert the public of these dangers and, moreover, to combat the production and distribution of fake medical supplies during—and beyond—this crisis.

Brands also need to find effective and meaningful ways to respond to the crisis. By this I mean that brands should look at how to best use their existing resources and capabilities to support efforts to curb the spread of the virus and help those suffering right now. This is how brands can have the greatest impact.

The public also expects this of brands to be good corporate citizens and implement corporate social responsibility (CSR) initiatives. In fact, 85% of respondents to INTA’s 2019 global study, Gen Z Insights: Brands and Counterfeit Products, believe that brands should aim to do good in the world. Brands need to share their CSR work (as it relates to COVID-19 and generally) with consumers, but they need to be sure first and foremost that their efforts are authentic and have real impact.

And this is also increasingly a matter of trust. As we know, IP—and trademarks specifically—are the foundation of trust between the brand and consumer. According to the 2019 Edelman Trust Barometer – In Brands We Trust, 69% of consumers say a brands’ impact on society is a key reason for trusting a brand. As such, brands should view protecting IP and undertaking effective CSR programs as a strategic priority if they are to win the trust of consumers.

Brands also have to innovate and adapt to the immediate challenges posed by social distancing measures and economic uncertainty. In the last few months, as an organization, INTA has been working tirelessly to keep our members engaged, and to continue our programming and events. We’ve been adapting to the times with strategies that may well continue in to the future.

For example, as you know, we’ve postponed and relocated our Annual Meeting. Our 2020 New York Conference – Brands in Society: Their Influence and Responsibility, originally scheduled to take place in March, will now take place virtually in June. We’ve also launched INTA TO-GO, a new e-learning platform, and we’re facilitating virtual speed networking.

We also established INTA Community Cares—COVID-19 Donation Campaign, a donation drive for our members to join together and do our share as a community. The campaign will, depending on the country, fund the purchase and distribution of masks and other personal protective equipment to public hospitals and/or nonprofit organizations; and/or contribute monies to local charitable organizations assisting health care institutions and the public in dealing with COVID-19.

This crisis also represents a turning point for the global economy and it is apparent that businesses will forever operate differently in a “new” environment. In terms of CSR, brands will need to continue to assume greater global responsibility as we emerge from COVID-19 and beyond.

Brands also need to ask: What are the long-term challenges and opportunities that this crisis brings? This is the case for INTA as well.  We can’t stay the same. We have to embrace innovation and change, rethink how we serve our members and bring them added value and reinvent ourselves to adapt to a new environment. This is how we will move confidently into the future.

As for IP, we need to identify how major global crises impact IP in the short and long terms.  We need to figure out what the trends mean for in-house legal teams, law firms, and IP offices, and together develop solutions for the challenges such crises pose for our industry and our community.

A message to young lawyers who wish to specialize in TM law.

Trademark and IP law in general is a fascinating area of law, probably the most global one. It’s one that you can understand really well because in your everyday life, as a consumer, you probably confront IP matters and particularly trademarks. And then it is extremely important to be proactive in terms of trying to educate yourself, in constantly following trends. It’s also extremely important to get involved in relevant organizations – no matter if it’s INTA or another one, but being part of this kind of network, attending conferences and meeting people – it’s a fascinating opportunity!