Courts Examine Protection of Collegiate Trademarks

April 22, 2009

Two courts recently vindicated the intellectual property rights of universities that had sued unlicensed manufacturers of sports fan paraphernalia that incorporated certain of the schools’ identifying colors or trademarks.

Use of School Colors on T-Shirts

In a ruling that suggests that universities can claim trademark protection in school-color schemes, the Fifth Circuit Court of Appeals upheld a Louisiana district court’s granting of summary judgment to Louisiana State University, The Ohio State University, the University of Oklahoma, the University of Southern California, and the Collegiate Licensing Company in their trademark infringement suit against Smack Apparel Co., an unlicensed purveyor of t-shirts that bore reference to each school’s football accomplishments. The appellate court also upheld the district court’s jury award of $10,506 in actual damages and $35,686 in lost profits.

The infringing products consisted of a collection of t-shirts, each incorporating the two-tone color scheme of one of the four universities, along with graphical and verbal references to the university that delicately avoided using any school’s registered trademarks. For example, for USC fans, Smack offered for sale a t-shirt that read “Got eight?” on the front and “We Do! Home of the 8 Time National Champions!” on the back. The back also included a depiction of the state of California with a star marked “SoCal” in the university’s colors of cardinal and gold. Shirts for the other three university defendants were similar in their indirect yet obvious reference to each university’s football feats, and for their use of each school’s two-tone color scheme.

The Fifth Circuit agreed with the universities’ argument that their individual school colors, when used on merchandise that combines other identifying indicia referring to the respective universities, can serve a source-identifying function for purposes of the Lanham Act. It further held that the schools’ colors had acquired secondary meaning and are non-functional.

Smack contended on appeal that factual issues existed as to whether its use of the schools’ colors was likely to cause confusion. Secondarily, it argued that its activities were protected as a nominative fair use. After analyzing each element of the likelihood of confusion test, the Fifth Circuit ruled that the “creation of a link in the consumer’s mind between the t-shirts and the Universities and the intent to directly profit therefrom results in ‘an unmistakable aura of deception’ and likelihood of confusion.” The court also rejected Smack’s fair use argument, finding that the colors and other indicia Smack used on the shirts did not compare Smack’s shirts with shirts licensed by the universities, but instead improperly suggested affiliation, sponsorship, or endorsement.

On March 23, 2009, Smack filed a petition with the Supreme Court of the United States, seeking a writ of certiorari. In its petition, Smack states that the Fifth Circuit erred in rejecting the argument that use of colors and phrases associated with a college should be deemed aesthetically functional elements. Smack further argues that the Fifth Circuit’s ruling is contrary to an earlier Ninth Circuit case and violates the longstanding tradition of permitted use of collegiate marks by local businesses.

Use of School’s Registered Trademarks on Foam Hand

In Auburn University v. Moody, a federal district court in Alabama awarded Auburn a preliminary injunction that prevented the defendant from further selling a six-fingered foam hand novelty souvenir that he had created and offered for sale through his website. Each finger of the souvenir bore the year and score of Auburn’s six recent successive victories over the University of Alabama in the intra-state rivals’ annual Iron Bowl. Emblazoned across the palm of the foam hand in blue lettering were the marks AUBURN and WAR EAGLE, both of which are registered trademarks of the university.

Despite the poor sales of the six-fingered foam hand and defendant’s ambivalent commercial ambition (Moody testified that he only sold 14 of the novelties, and that he only hoped to “make enough money to pay the cost and buy some beer”), the court found that Moody had used Auburn’s marks in commerce and in such a way as to likely cause confusion, particularly given that authorized Auburn foam hands exist on the market. The court concluded that Auburn had demonstrated the threat of irreparable harm absent the issuance of an injunction.

For the full opinion of each case, see Board of Supervisors for Louisiana State University Agricultural and Mechanical College v. Smack Apparel Co., 550 F.3d 465 (5th Cir. 2008), petition for cert. filed (U.S. Mar. 23, 2009) (No. 08-1197), and Auburn University v. Moody, No. 3:08-cv-796, 2008 WL 4877542 (M.D. Ala. Nov. 4, 2008).

For more information please contact the authors or other members of our Higher Education industry team.