Smack Apparel revisited on appeal: significant victory or narrow extension of trademark protection for universities' color schemes?

Grady, John

Introduction

The highly publicized case of Board of Supervisors of Louisiana State University, et al. v. Smack Apparel (2008) moved one step closer to resolution with the Fifth Circuit's decision in favor of the plaintiff universities. The appellate court affirmed the district court's holding that Smack Apparel was liable for trademark infringement. The court's opinion provides sport marketers with an understanding of the legal issues that are frequently litigated in cases involving manufacturers of unlicensed sports merchandise. The case also highlights the need for sport marketers to work hand in hand with legal counsel to proffer evidence, in the form of marketing materials and promotional campaigns, establishing a link between consumers' association of their trademarks and the university's branding efforts with respect to school colors.

Facts of the Case

The plaintiffs in this case included several universities with high profile athletics programs, including Louisiana State University, Ohio State University, the University of Southern California, as well as the Collegiate Licensing Company, the licensing agent for these schools. Each university owns trademark registrations for both their names and their commonly used initials. In addition, each university adopted a two-color scheme as its school colors and has used their respective color combinations for over 100 years.

The defendants are Smack Apparel Company and its principal, Wayne Curtiss. According to Curtiss, Smack Apparel uses humor and creative language to distinguish its t-shirt designs from the more conservative licensed or school-endorsed apparel. It is noteworthy that while many of the t-shirts produced by Smack Apparel used the color schemes adopted by each of the schools and made reference to the various schools' national championship records, the designs did not necessarily refer to the schools by names, which are registered trademarks.

At issue in the litigation were six shirts that Smack Apparel manufactured that referred to the universities' athletic accomplishments, specifically LSU and Oklahoma University's participation in the 2004 Sugar Bowl as well as the number of championships previously won by Ohio State University and the University of Southern California. The plaintiffs asserted that Smack Apparel's merchandise violated several federal and state laws and included claims for trademark infringement and unfair competition under the Lanham Act, unfair trade practices, and trademark dilution. The plaintiffs and defendants each moved for summary judgment on the federal and state claims. The district court found for the plaintiffs, holding that the universities' trademarks in their color schemes had acquired secondary meaning (Smack Apparel, 2006, pp. 657-658). The district court also concluded that the marks in their color schemes were strong and that Smack Apparel's t-shirt designs were likely to cause confusion as to the source, affiliation, or sponsorship of the shirts (Smack Apparel, 2006, pp. 658-661).

In considering the case on appeal, the court reiterated that the universities were not trying to claim infringement of their trademarks for every instance where their team colors appeared. Rather, they were claiming their rights were infringed when their color schemes were used on merchandise that also contained other identifying indicia of the university (e.g., logos, mascots, or other verbiage associated with the university). The appellate court concluded it was therefore proper to consider not only the colors used but also the entire context in which the colors and other indicia appeared on the merchandise.

The court first had to consider whether the marks in the color schemes had acquired secondary meaning of identifying the universities in the minds of consumers as the source or sponsor of the products. The court answered this question in the affirmative, noting the universities' longstanding use of color scheme marks as well as their use of school's colors as "shorthand" when referring to themselves. For example, LSU and others refer to it as the "Purple and Gold." According to the court of appeals, "these color schemes are immediately recognizable to those who are familiar with the [u]niversity" (Smack Apparel, 2008, p. 472).

The appellate court also agreed with the district court that the use of irreverent phrases on Smack Apparel's shirts was a misuse of university's goodwill in its trademarks. However, the court acknowledged that Smack Apparel did not argue that its t-shirts were distinguishable from those licensed by the university because of the particular language on the shirts. This would have inevitably raised First Amendment questions about the free speech protection related to the messages on the shirts. The First Amendment arguments were likely not raised because the six Smack Apparel shirts at issue in the litigation were, for the most part, laudatory in nature and dealt with the university's athletic accomplishments. The court found that use of creative language was not unique to Smack Apparel and did not make their shirts dissimilar to the university's own licensed products. The court's opinion, however, provides no guidance in terms of whether other "trash-talking" t-shirts with irreverent or offensive phrases, which Smack Apparel is known for, would be protected under the First Amendment. With regard to these types of shirts, average consumers would arguably be less likely to be confused as to whether the universities are the source or sponsor of the products. This leaves a significant legal question largely unanswered and provides the opportunity for a future court to resolve.

The appellate decision in favor of the universities seemed to hinge upon two key points: (1) the court's finding of an overwhelming similarity between Smack Apparel's t-shirts and the universities' licensed products and (2) Smack Apparel's admission that its use of colors and indicia on its shirts was done purposely to call the universities to the minds of the fans. In addition, the court's findings that any demand for Smack Apparel's shirts was inextricably tied to the university's trademarks and that Smack Apparel intentionally copied the color schemes for use on its shirts ultimately proved fatal to Smack Apparel's case on appeal. These findings, as well as Smack Apparel's failure to prevail on any of the affirmative defenses, seemed to tip the court's balancing the likelihood of confusion factors heavily in favor of the universities.

Commentary and Criticism of the Decision

The Smack Apparel case presents some novel legal issues concerning trademark protection for color schemes used by universities and may aid in resolving unsettled legal theory with regard to the scope of trademark protection of colors. However, it remains unclear at this point whether this is a narrow decision applicable to the six T-shirts at issue in the litigation or whether it is a significant victory that establishes new legal precedent and arguably expands the scope of trademark protection.

In terms of precedential value, the decision reaffirms the Supreme Court's decision in Qualitex Co. v. Jacobson Products Co. (1995) that a color scheme can be protected as a stand-alone trademark provided it can be established that the color scheme has acquired secondary meaning. However, the rationale relied upon by the appellate court to support the conclusion that Smack Apparel's t-shirt designs resulted in a likelihood of confusion is easily distinguishable. The court relied upon the precedent set in Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem Manufacturing, Inc. (1975) in which the defendants were selling embroidered patches containing the emblems of professional sports teams. In that case, the Fifth Circuit found the likelihood of confusion requirement was met insofar as the sale of products "universally associated" with the hockey team "supported the inescapable inference that many would believe that product itself originated with or was somehow endorsed by Boston Hockey" (Boston Hockey, 1975, p. 389). Boston Hockey (1975) is factually distinguishable from Smack Apparel, however, in that while both the team's logos and color schemes can be protected as trademarks, it is logical to assume that consumers would be far more likely to believe that the sports team or university is the source of the goods when it contains the team's trademarked logo rather than when it merely contains the team's color scheme and other identifying indicia.

The court's implied treatment of consumers' associations with the logos or emblems as somehow equivalent to their associations with the color schemes and other identifiers of the university is not justifiable. By extending the rationale to include protection of universities' color schemes, acknowledged by the court as unsettled legal theory, the court appears to be taking an unjustified leap to reach their conclusions regarding secondary meaning and likelihood of confusion. There is a well developed body of case law to support protection of team logos and emblems as source identifiers when compared to the relatively thin body of case law supporting trademark protection of colors.

Implications for Sport Marketers and Manufacturers of Licensed Team-Related Apparel

Collegiate athletic departments and their licensing companies must remain vigilant in controlling the use of their name and color trademarks on all types of sport merchandise, including laudatory as well as "trash talking" t-shirts. The risk to the university in not maintaining adequate controls of distribution channels is the potential for dilution of the marks. Trademark dilution negatively impacts the university's branding efforts and diminishes the goodwill fans have in their marks. Since most high profile college athletic departments have widely recognizable trademarks in their names and color schemes and obtain substantial ancillary revenues from the sale of licensed goods bearing those marks, it becomes necessary for sport marketers to document their efforts to promote the school's colors through marketing campaigns and promotional materials. Furthermore, given that the t-shirts at issue in the Smack Apparel litigation were tied to bowl game appearances and national championships, sport marketers should be especially attuned to monitoring the marketplace for goods that may be produced with short turnaround times during the time of bowl appearances or after national championship victories. These efforts will not only help to cleanse the marketplace of unlicensed goods but may also be used as powerful evidence to demonstrate that the trademark owners are aggressively controlling the use of their marks.

Editor's Note: At the time of publication, defendant Smack Apparel had filed a petition for rehearing en banc in the Fifth Circuit, asking the full court to over-rule Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem Manufacturing, Inc. (1975).

Professors Anita M. Moorman, J.D., of the University of Louisville and Steve McKelvey, J.D. of the University of Massachusetts, Amherst are the co-editors of this feature column. Professors Moorman and McKelvey teach Sport Law in the Sport Administration Programs at their respective universities.

Inquiries regarding this feature may be directed to Anita M. Moorman at amm@louisville.edu and Steve McKelvey at mckelvey@sportmgt.umass.edu

DISCLAIMER: The materials in this column have been prepared for informational and educational purposes only, and should in no way be considered legal advice. You should not act or rely upon these materials without first consulting an attorney. By providing these materials it is not the intent of Professor Moorman or McKelvey to enter into an attorney-client relationship with the reader. This is not a solicitation for business. If you choose to contact either of us through e-mail, please do not provide us with any confidential information.

References

Board of Supervisors of the Louisiana State University and Agricultural and Mechanical College, et al v. Smack Apparel, et al, 438 F. Supp. 2d 653 (E.D. La. 2006), affirmed by, 550 F.3d 465 (5th Cir. 2008).

Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem Manufacturing, Inc., 510 F.2d 1004 (5th Cir. 1975).

Qualitex v. Jacobson Products Co., 514 U.S. 159 (1995).

John Grady

John Grady, J.D., Ph.D. is an assistant professor in the Department of Sport & Entertainment Management at the University of South Carolina. His research interests are focused on intellectual property issues in sport and accommodating spectators with disabilities in sport and entertainment venues.