University colors are firmly ensconced in the cultures of many institutions, particularly those whose sports teams have long and successful histories as unifying forces for students and alumni. Think Carolina Blue for the University of North Carolina at Chapel Hill, the University of Texas at Austin's burnt orange, the the University of Michigan's maize and blue. But it's a big leap from cultural icon to legal trademark, isn't it?
Not as big as it once was, thanks to a federal appeals court decision issued last week. On Wednesday, the U.S. Court of Appeals for the Fifth Circuit -- ruling in a case involving an apparel manufacturer that made T-shirts that incorporated the colors but not the names or logos of major college football programs -- declared that the use of "color schemes along with other indicia" that have come to be strongly associated with a university can be enough to trigger a finding of trademark violation when they create a "a probability of confusion" in the mind of consumers.
The ruling, which treads some new ground in trademark law, also gives colleges more legal authority to defend their trademark licenses, said R. Charles Henn Jr., a lawyer who represented Louisiana State and Ohio State Universities and the Universities of Oklahoma and Southern California, which brought the lawsuit. "This is a very strong opinion for universities in the sense that it will allow them to go to their licensees and say, 'This is why you pay your license fee,' " Henn said. "It will allow universities in the enforcement of trademark to have an opinion that they can use offensively as they go after violations."
The four universities sued the company, Smack Apparel, in 2004 after they objected to a total of six styles of T-shirts related to the appearance of Oklahoma and LSU in the 2004 Sugar Bowl and to a series of national championships previously won by Ohio State and USC.
One of the shirts, for example, contained the final score of that Sugar Bowl, which LSU won, and the phrase "Sugar is Sweet." Although it did not use the phrase "LSU" anywhere, it was done up in the university's purple and gold colors. Another of the shirts, in Ohio State's scarlet and gray colors, had the phrase "Got Seven?" on the front and, on the back, the phrase "“We do! 7 Time National Champs,” along with a map of Ohio and a marker noting the location of Columbus, home to the university.
A federal court in 2006 endorsed the universities' arguments that Smack’s products were purposefully similar enough to their own licensed products that they were likely to mislead consumers into believing that the company's goods were produced by or associated with the universities' own. (This is not an incidental matter to the universities, the court noted, since the universities -- like many that play big-time sports -- earn tens of millions of dollars a year from the licensing of apparel and other goods related to their teams.) A jury awarded the universities damages of about $10,500 and lost profits of nearly $36,000, and the court barred Smack from manufacturing or selling the six T-shirt designs in question.
Lawyers for Smack appealed to the U.S. Court of Appeals for the Fifth Circuit, which covers the states of Louisiana, Mississippi, and Texas. Jim Tilly, a lawyer for Smack, said the company had appealed in part because its officials did not believe the district court had engaged in the kind of analysis that is typical in such cases. "The primary issue in these sorts of cases is usually whether the public is likely to be confused into thinking the defendant's products were somehow endorsed or approved by the plaintiff," Tilly said. "But this court didn't really seem to care what evidence we produced -- it was intent on finding that there was confusion, based on the view that the public has such strong relationships to college colors."
The three-judge panel of the Fifth Circuit appeals court took very much the same stance as the lower court. In their ruling, the judges laid out the two major criteria the universities had to meet to prove trademark infringement: to "establish ownership in a legally protectible mark," and to "show infringement by demonstrating a likelihood of confusion" between Smack's apparel and the universities' own products.
On the first point, the court concludes that the universities "have been using their color schemes along with other indicia to identify and distinguish themselves from others," and that "[g]iven the longstanding use of the color scheme marks and their prominent display on merchandise, in addition to the well-known nature of the colors as shorthand for the schools themselves and Smack’s intentional use of the colors and other references, there is no genuine issue of fact that when viewed in the context of t-shirts or other apparel, the marks at issue here have acquired the secondary meaning of identifying the universities in the minds of consumers as the source or sponsor of the products rather than identifying the products themselves."
That finding is consistent, the court wrote, "with the importance generally placed on sports team logos and colors by the public," and the "desire by consumers to associate with a particular university supports the conclusion that team colors and logos are, in the minds of the fans and other consumers," indicators that the universities are the "source indicators of team-related apparel."
Having determined that the universities' colors (in combination with "other indicia" such as the scores of their teams' games, their geographical locations, and the like) qualified for legal protection under trademark law, the Fifth Circuit court turned to the question of whether Smack's shirts created confusion in the minds of consumers.
This was not a close call in the judges' judgment, citing a number of "digits of confusion" -- related to similarities between the products themselves, how they are advertised and where they are sold, and the like -- that combine to create a clear impression in consumers' minds. "[W]e conclude that there is no genuine issue of fact that Smack’s use of the universities’ color schemes and other identifying indicia creates a likelihood of confusion as to the source, affiliation, or sponsorship of the t-shirts. As noted above, the digits of confusion -- particularly the overwhelming similarity of the marks and the defendant’s intent to profit from the universities’ reputation -- compel this conclusion," the court's opinion states.
"This is so, we have noted, because Smack’s use of the universities’ colors and indicia is designed to create the illusion of affiliation with the universities and essentially obtain a 'free ride' by profiting from confusion among the fans of the universities’ football teams who desire to show support for and affiliation with those teams. This 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."
Tilly, the lawyer for Smack, said his client was deciding whether to appeal. He noted that the ruling applies only to the limited number of shirts specifically challenged by LSU, Ohio State and the other plaintiffs in the case, and that despite the Fifth Circuit's broadening of trademark law to include college colors in this case, other federal courts have found that no infringement by apparel that is clearly distinguishable from that produced by institutions themselves.
Most of Smack's shirts and other equipment, he points out, "taunt the opponent" rather than "extol the virtue of a college," he said, and since "universities tend not to approve or license shirts that taunt their opponents," Smack is free to make shirts like that.
But the Fifth Circuit's ruling will be very popular among not only the four universities directly involved in the case, but the nearly two dozen other universities and major professional sports leagues that filed friend of the court briefs urging the appeals panel to side with LSU and its peers. "This decision will provide schools who are not a party [to the lawsuit] more of a leg to stand on in terms of enforcing [their trademark] rights," said Henn.
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