Intellectual Property and Sports: Tracing the Connections
This year’s World Intellectual Property Day delves into the world of sports and takes a closer look at how intellectual property (IP) rights – patents, trademarks, designs, copyright and related rights, and even plant variety protection (think turf on sports pitches) – support the global sports ecosystem, a unique landscape the brings together multiple players with overlapping interests.
The players
Broadly speaking these include:
- Organizers of sports events, tournaments and competitions whose interest is to stage a high-quality event that attracts high caliber athletes and draws large crowds and audiences.
- Sports federations who set the rules of the game and maintain the integrity of a given sport. Their aim is to ensure that athletes and teams perform at the highest level and to attract more public interest in the sport so it continues to develop.
- Athletes, teams and their trainers want to beat their personal best, break new records, win and be recognized for their achievements.
- Manufacturers of sports equipment want commercial success. With that goal in mind, they focus on producing innovative, high-quality products that give them a competitive advantage in the marketplace.
- Broadcasters and other media platforms are interested in securing the exclusive rights to broadcast these exciting events live to boost audience ratings.
- Corporate sponsors who leverage their trademarks rights in sponsorship deals to promote their products in sports venues, and offer an important additional stream of revenue for organizers of sports events.
- Sports fans want the best possible fan experience and, where they cannot make it to a game, a wide range of high-quality viewing options that bring them as close as possible to sports action.
IP rights underpin all of the commercial relationships that make sports events happen, and that allow us to tune in to sporting action whenever, wherever, and however we want. But before we go further, let’s reflect on why it is that we have an IP system.
Why IP rights?
The main purpose of IP rights is to encourage more innovation and creativity by making sure that inventors and creators get a fair reward for their work and can earn a living from it and to protect the goodwill that is vested in brands.
Different rights protect different types of IP, such as inventions (patents), brands (trademarks), designs (industrial design rights or design patents), and creative works, such as sports programs and other sports-related creative outputs, and certain sports broadcasts (copyright and related rights).
IP rights allow rights holders to stop other people from copying or using their IP without their permission. This means that rights holders are able to charge a price for using IP. The prospect of an economic reward encourages people and businesses to invest in developing innovations, creations and branded products that we can all benefit from.
Most IP rights last for a limited time, and are only granted when certain conditions are met. There are also rules that allow for the use, under certain limited circumstances, of different types of IP without first having to obtain the right holder’s permission. These arrangements help ensure that that there is a balance between the interests of innovators and creators and those of the general public, so that everyone benefits from IP.
To sum up, IP rights encourage innovation and creativity in all areas, including in sports. More innovation and creativity in sports means access to a continuous flow of new ways to enhance athletic performance and our enjoyment of sports – better equipment, more business opportunities, more jobs and a fabulous fan experience.
Patents and inventions
Technology has always had a role to play in the sports landscape, but the advent of digital technologies has fueled technological development like never before. Innovative technologies – typically protected by patents (or as trade secrets) – are taking sports to new heights. These technologies are transforming the sports experience from the training camp to the sports stadium to our living room, and are opening the way for new sports – think e-sport and drone racing – to emerge. Today sports tech is experiencing huge growth.
ZHOR-Tech’s Safety Smart Shoe monitors and analyzes
sports activity and provides data to identify injury risks and
improve performance.
Smart sports equipment embedded with sensors and other sophisticated information and communication technologies are now widespread. These smart technologies allow athletes (at elite and amateur levels) and their trainers to track and evaluate performance and identify areas for improvement. While elite athletes may be the first to try out and use these technologies, as they reach the market, we all get to benefit from them and monitor our own daily exercise, hydration levels and more.
Strong, durable, light-weight innovative composite materials, such as those used in sports shoes and other protective gear like helmets for cycling and skiing, make sports safer and reduce the risk of injury for athletes and sports’ lovers at all levels.
In the sports stadium, millions are being invested in innovative technologies to ensure fans have access to a rich blend of physical and digital experiences. High-grade Wi-Fi networks ensure fans are connected and can share their experience with friends and take advantage of mobile apps offering wide ranging services for a hassle-free fan experience – from finding a parking spot, to ordering food or upgrading a seat at a sports venue, to accessing high-definition action replays and close-ups, data and much more. Similarly, advanced broadcasting technologies are enabling fans in distant places to get ever closer to sporting action whenever, wherever and however they wish.
Innovative technologies are also transforming the fan experience, creating many exciting new ways for fans to enjoy the sports they love. Sports organizations are teaming up with tech companies to ensure that sports content is social (i.e. shareable via social media), accessible (on multiple devices), interactive (customizable) and engaging.
How sport and tech are teaming up to enrich fan experience
Sports Business Media recently reported that the Canada’s National Hockey League’s multi-year global content agreement with Disney Streaming Services includes “a new weekly highlights show on Snapchat recapping the top 10 plays of the previous week.” Interestingly, the deal also includes a commitment from NHL to produce “a minimum of 15 curated stories per season with video and photos taken from publicly submitted user Snaps.”
The technology-driven services company, Sports Innovation Lab, reports that in 2017, UEFA, Fox and Facebook worked together to stream the UEFA Champions League on their respective platforms. This resulted in 34 million Facebook users interacting 98 million times with the Champions League. Similarly, in 2018, the Olympic Broadcast Service teamed up with Intel to capture over 50 hours of sports footage in virtual reality.
Blending virtual and real worlds
More and more sports organizations are experimenting with virtual reality (VR) and augmented reality (AR) to improve player performance and offer fans a more intense, immersive viewing experience with unprecedented new perspectives on sports action. These technologies bring fans to the sports field without having to leave the comfort of their home. For example, the National Football League (NFL) is collaborating with Oculus Rift to bring fans to the center of sporting action. VR broadcasters such as NextVR are offering fans a range of immersive sports broadcasts with VR. Other traditional broadcasters such as the BBC and NBC are including VR components in their coverage of marquee sports events.
In 2018 the McLaren Formula One team announced that it had teamed up with HTC to offer its 100 million fans around the world “new VR content, hardware and e-sport to make McLaren more immersive.” Major clubs like FC Barcelona, Real Madrid in Spain, Arsenal FC, Liverpool FC and Manchester City in the United Kingdom and the leagues like the NBA and NFL in the United States are teaming up with Intel to deploy Intel® True VR technology. This involves placing high resolution, “data-crunching” devices at key locations around arenas and stadiums to allow fans to view “recaps and highlights, and get new angles on the most amazing moments in sports.” So even if you can’t get a ticket for match day, you can follow from afar as if you were there.
Similarly, for the 2018 European Championships in Berlin and Glasgow, the European Broadcasting Union and its business arm Eurovision Media Services developed a range of new tools and services for its member broadcasters to offer a tailored VR experience to boost fan engagement.
And augmented reality (AR) is also being applied in new and interesting ways to fuel the fan interest and enrich their experience. These technologies fuse the virtual and real worlds providing fans with a variety of infotainment options (providing information on venue-related facilities and sports data in 3-D formats) to help build engagement and excitement around a sports event.
Design
Where there are technological developments using new materials, design and aesthetics are not far behind. The influence of design in the world of sports is far-reaching. In the highly competitive sports marketplace, design contributes to the distinct identity of sports competitions, teams and their sports gear.
Design makes a product, and a sports event, more attractive and appealing to consumers and plays a critical role in adding commercial value and making the product or the event more attractive and marketable. We are all prepared to pay a little extra for a design that makes a statement about our lifestyle and approach to life. Businesses can protect the investment they make in coming up with new, attractive designs, by obtaining industrial design rights or design patents.
Trademarks and branding
Staging a sports event is a costly undertaking. Strategic use of trademarks – an IP right that enables businesses to build up their reputation and stand apart from competitors in the marketplace – can generate significant revenue streams to cover the costs of organizing these events.
A trademark is a sign that is capable of distinguishing the goods or services of one entity from those of another. Trademarks are powerful and indispensable marketing tools. In the world of sports, their strategic use opens up significant commercial opportunities to generate income.
Sports fans have a deep emotional connection with the teams, leagues and competitions they follow. Sports clubs like Manchester United, for example, leverage their brand and the loyalty of their fans to increase the club’s revenue and profitability through sponsorship deals and new digital media and content opportunities. From 2015 to 2017, the club enjoyed a 4.6 percent compound annual growth rate in its sponsorship revenues.
Sports sponsorship deals are underpinned by trademark rights and can be extremely lucrative. Recognizing its global appeal and power as a marketing platform, companies in many sectors are turning to sports to build awareness of their products among consumers, drive sales and stand out in a crowded and highly competitive market.
The value of sports sponsorship is clearly demonstrated by the Olympic Games. The Olympic Partners (TOP) Program has been dubbed “one of the most effective international marketing platforms in the world”. According to the International Olympic Committee (IOC), these commercial partnerships generate more than 40 percent of Olympic revenues and ensure organizers of the Olympic Games have access to the technical services and products required to ensure that this global festival of sports runs smoothly. Under the program, each Worldwide Olympic Partner acquires “exclusive global marketing rights and opportunities within a designated product or service category.” Revenues generated by the Olympic Partners Program and other Olympic marketing programs, are distributed “throughout the entire Olympic Movement” to promote the development of sport in general, and also to “provide financial support for sport in emerging nations.”
Many sports organizations also use their trademark and other IP rights to leverage the value of their brand by licensing them to third parties to produce merchandize, including apparel, accessories, footwear and more. For example, Manchester United has a 10-year agreement (it runs through July 2025) with sportswear giant, Adidas, with respect to global technical sponsorship and dual-branded licensing rights. According to the Club, it plans to expand its portfolio of product licensees and to enhance the range of products available to its fans. The strategic marketing alliances that now exist between sports organizations and major apparel companies like Adidas, Nike, Puma, Under Armour, etc., mean that sports clubs and leagues are now fast becoming global lifestyle brands as consumers buy in to the powerful image and values that sports encompass.
Top athletes are also getting in on the game. Many are leveraging their personal brands (built around their sporting success) to generate significant revenue through endorsement contracts with major sportswear and other companies. Recognizing the significant marketing potential of these superstars, companies often pay millions of dollars for sports (and other) high-profile personalities to endorse their products. Some even develop product ranges bearing the athlete’s name. That’s what Nike did when it developed its products ranges for basketball superstars Michael Jordan and Lebron James. Countless athletes in many other sports, for example, Lewis Hamilton (Formula One), David Beckham (soccer), Rory McIlroy (golf), Lindsey Vonn (downhill skiing), Maria Sharapova (tennis) and more have benefited from such endorsement deals.
Copyright and broadcasting
Sports organizations depend on broadcasters to transmit coverage of their events and engage fans worldwide, and indeed, to attract sponsors. Copyright and related rights, especially those relating to broadcasting organizations, underpin the relationship between sport, television and other media. While sports events as such, do not generally qualify for copyright protection, media companies pay huge sums of money for the exclusive right to broadcast top sports events live. Such events attract millions of fans eager savor the excitement that flows as a sports contest unfolds.
The sale of broadcasting and media rights, the value of which has sky-rocketed in recent years, is now the largest source of revenue for most sports organizations. The funds they generate off-set the cost of financing major sports events, refurbishing stadiums and also contribute to the grass-roots development of sports.
Broadcast revenue from the Rio 2016 Olympic Games, for example, was of the order of USD 2,868 million, 90 percent of the funds generated by the IOC through sponsorship deals and the sale of broadcasting rights are re-invested in the worldwide development of sports.
The royalties that broadcasters earn from selling their exclusive footage to other media outlets enable them to invest in the technology and logistics involved in broadcasting events to millions of fans across the globe.
Broadcasters’ rights safeguard the hefty costs associated with broadcasting sports events, recognize and reward the entrepreneurial efforts of broadcasting organizations and their contribution to the diffusion of information and culture.
Broadcasters are taking advantage of the rapid evolution of digital media to reach out to and engage audiences by offering sports coverage in a variety of formats and across different platforms. The sports media landscape is rapidly evolving, with new non-traditional media players, such as streaming platforms like beIN sports, FirstRow, entering the fray. This is changing the landscape both in terms of who is creating content and who is distributing it and has contributed to a significant increase of signal piracy. The advent of these new services, is offering fans a wider range of viewing options and fueling competition for the right to distribute sports content.
Sport, IP and development
The strategic use of IP rights in global sports has significant potential to support economic development in a variety of ways by:
- Generating income from the sale of sports-related goods and services;
- Supporting innovation and business growth, entrepreneurship and job creation;
- Enhancing a country’s reputation and boosting foreign exchange earnings;
- Boosting international trade;
- Transcending national differences and fostering universal values of fair play, mutual respect and friendship; and
- Improving health, social-well-being and social cohesion and encouraging discipline, teamwork and a competitive spirit.
Staging sports events, whether at grassroots, national or international levels, can enrich the social and cultural fabric of communities, making them more attractive locations for investors and tourists. However, the business of sports requires a solid legal framework to support the exploitation of and trade in IP rights, as well as a well-trained workforce to create a favorable policy and regulatory environment and to manage the operational and logistical issues associated with organizing sports events.
Recognizing the huge potential of IP and sports to drive social and economic development, many countries are now integrating IP and sports-related objectives into their national development strategies. By supporting the development of a thriving and sustainable sports sector, and becoming an attractive location for major sports events to take place, these countries seek to create additional opportunities for social and economic development and wealth creation.
IP and sports: What WIPO is doing
WIPO supports these endeavors, and at the request of its member states, advises governments and policymakers on how to integrate IP and sports-related objectives into national development plans. And, through a range of activities, WIPO works with its partners to raise awareness about the relevance of IP to sports ecosystem within a country. Seminars and training programs focus on developing the human and institutional skills and knowledge to support the business of sports in member states to spur innovation, support business growth and social and economic development. Supporting the development of an enabling regulatory environment for IP is an important part of these activities. This includes building respect of IP rights and advising on ways to tackle abuses or infringement of IP rights. Such violations undermine the ability of organizers of sports events to attract sponsors and diminish the benefits of hosting major sports events.
These capacity-building activities are tailored to the specific social and cultural context of each country. They involve many stakeholders: government and other public bodies, enforcement officials and members of the judiciary, legal practitioners, sports agents, athletes, clubs, sports federations, event organizers, donors, sponsors, sporting goods manufacturers and television and media companies.
The global sports ecosystem is made up of a complex web of players and commercial relationships underpinned by IP rights. The strategic use of these rights has, to a large extent, enabled the rapid growth of the global sports industry, and will continue to play a central role in the future evolution of sports in a rapidly evolving and evermore technology-driven landscape. A focus on IP and sports also offers significant opportunities to foster the social, economic and cultural development of all nations.