Nouvelles tendances : Il n'y a pas que les marchés qui s'adaptent, la loi aussi

March 1, 2013

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February 7, 2024

Sponsorship agreements in the sports world: the promise of fame and exposure

“I was outraged!” “It beggars belief!” “It’s ridiculous!”1 These are just a few of the comments heard in connection with a controversial clause in Neymar’s contract with the Saudi Arabia-based Al Hilal soccer club, which he signed in August 2023. It provided for a payment of approximately $500,000 for each Instagram post promoting Saudi Arabia... In stark contrast, other observers applauded this initiative, viewing Neymar as the harbinger of an era in which sports talent would finally be valued for its true worth. Even before he’d laced up his cleats for his new team, Neymar was already shining a warm spotlight on the Saudi kingdom. At a press conference on September 7, 2023, the Brazilian forward cheekily likened France’s League 1, in which he used to play (it is ranked the fifth-best soccer league in the world) to Saudi Arabia’s (ranked 36th): “Considering all the big names in this League, this championship may well be better than League 1.”2 Needless to say, his comment sparked a tidal wave of reactions. For comparison purposes, Major League Soccer (MLS), CF Montreal’s home league, is ranked #29 in the world. Figure 1: Photo posted on Instagram by Neymar (left), who appears to be enjoying himself in Saudi Arabia. This post was “liked” by over 7.3 million Instagram users. Thriving on competition, passion and adrenalin, the sports world is fertile ground for sponsorship agreements. These arrangements serve as strategic alliances that capture the essence of contemporary sports and transcend the limits of the games involved. In our last two articles, we took a look at issues surrounding the naming of sports teams, followed by agreements governing the naming of stadiums and arenas. This time around, we will delve into the topic of sponsorship agreements. In addition to defining what they are, we will focus on how these agreements are used and structured, including their objectives and associated risks. WHAT ARE SPONSORSHIP AGREEMENTS? Sponsorship agreements, also known as sponsorship deals, are commercial agreements entered into by a beneficiary (an organization, individual or event) and a sponsor (a company or brand). As a general rule, these agreements provide financial compensation, goods and/or services in return for visibility, promotional impact or the sponsor’s association with the beneficiary. To be sure, such deals are not exclusive to the sports world. However, sports have definitely played a key role in how these agreements have evolved, transforming them into tools at the forefront of commercial progress. In this article, we will focus on how these agreements are used in the sports world. THE POWER OF SPONSORSHIP AGREEMENTS In essence, sponsorship agreements enable a sponsor to benefit from the exposure, fame and/or positive image associated with an athlete. At the same time, they may allow athletes to boost their own visibility and develop their own brands in partnership with the sponsor. The film Air, initially released in cinemas in 2023 and now exclusively available on the Prime Video streaming platform, depicts the dynamic of sponsorship agreements. It retraces the origins of the emblematic partnership between Nike and basketball legend Michael Jordan, which ended up redefining how athletes approach business partnerships. The Nike partnership gave rise to Air Jordan, the world-famous line of basketball shoes, marking an initial milestone in the history of sponsorship deals. In April 1985, the first series of Air Jordans came onto the market (see Figure 2); Nike was aiming for $3 million in sales over an initial three-year period. However, by the end of the first year alone, sales topped an impressive $126 million. In 2022, it was reported that Michael Jordan had earned between $150 million and $256 million just from his contract with Nike. Figure 2: Michael Jordan and the very first Air Jordans in 1985. The colour red was in violation of National Basketball Association (NBA) rules at the time. As a result, Nike paid a fine of $5,000 per game. KEY OBJECTIVES OF SPONSORSHIP AGREEMENTS FOR ATHLETES Main objective: financial gain Quite often, the main objective is financial gain. In addition to Michael Jordan, other star athletes have signed agreements with Nike. LeBron James’ and Cristiano Ronaldo’ own deals with Nike are reportedly valued at US$1 billion. Meanwhile, Argentina’s Lionel Messi, the eight-time Ballon d’Or winner, entered into a similar agreement with the brand Adidas. The case of Michael Jordan, however, is unique insofar as a family of strong and distinctive brands was developed, including Air Jordan and various logos representing Michael Jordan playing basketball. This brand family is owned by Nike, although it is inherently linked to the athlete reaping its benefits. In Quebec, tennis player Félix Auger-Aliassime, a victim of his recent success, signed agreements with Dior and Renault in early 2023 as these companies added their names to his existing list of sponsors, which included Adidas. The compensation paid by these brands has not been disclosed, but Félix is now displaying the Renault logo on his T-shirts—even more prominently than the brand of the T-shirt itself (Figure 3). Figure 3: Félix Auger-Aliassime and the Renault logo. The Adidas logo is also visible on his wristbands. Objective: enhanced reputation and greater credibility Reputation and credibility are vitally important in the sports world. Teaming up with a reputable sponsor can boost an athlete’s credibility in the eyes of fans, the media, potential partners and other teams. As with naming rights agreements, upholding the same values and selecting the right sponsor are the key to these agreements. Consider Félix Auger-Aliassime’s remarks after signing his deal with Renault: “I’m proud to be associated with Renault because we share the same ambitions and values […].”3 Chelsea FC, which competes in England’s Premier League, kicked off its 2023-204 season without its main sponsor. In addition, there was no corporate logo displayed on the front of the players’ jerseys, even though that has become the norm in the soccer world (Figures 4 and 5). Figure 4: As CF Montreal’s main sponsor, Bank of Montreal (BMO) has its logo is displayed on the front of the team’s jerseys. Figure 5: Chelsea’s jersey has no corporate logos (the club has no main sponsor). In fact, Chelsea had signed an agreement with Stake.com, an online casino that describes itself as a pioneer in the area of crypto sports betting. As soon as the deal was announced, fans made their displeasure known: Chelsea Supporters’ Trust, which serves as the voice of the team’s fans, declared: “We understand CFC’s desire to maximise revenue streams across the whole club. Whilst we accept that will happen, it must not take place at the expense of the club’s values.”4 Chelsea thus terminated the agreement but appears to have found a new partner, the US-based technology company Infinite Athlete. That deal is valued at around $66 million per year. Objective: an equitable relationship between the parties (student athletes) For some athletes, sponsorship agreements are also a way to establish an equitable relationship between all parties, ensuring that they do not lose out on any benefits derived from their name, image or likeness. This is certainly the case for student athletes competing in the American university system, particularly the National Collegiate Athletic Association (NCAA). In June 2021, the US Supreme Court ruled that the NCAA was not legally authorized to limit payments related to students’ education. This gave rise to what are known as “NIL deals”(name, image, and likeness). Student athletes are now entitled to enter into sponsorship agreements covering their name, image and likeness (the latter term refers to any representations of the athlete, whether in videogames, cartoons, etc.). The champion of NIL deals is undoubtedly Olivia Dunne, a gymnast at Louisiana State University. She is one of the first student athletes to become a millionaire thanks to these deals; she is certainly the best known (Figure 6). Her arrangements with brands such as American Eagle, Forever 21 and Vuori have generated more than $4.7 million. She ranks third in earnings in the list of athletes with NIL deals, just behind quarterback Arch Manning at $5.1 million (nephew of former football players Peyton and Eli Manning) and basketball player Bronny James at $9.7 million (son of LeBron James). Will we ever see NIL deals for student athletes in Quebec? Figure 6: Olivia Dunne, gymnast and multi-millionaire at age 20 thanks to her sponsorship deals. KEY OBJECTIVES FOR SPONSORS As far as sponsors are concerned, their objectives are usually quite similar. They hope to obtain greater visibility and promotion by linking their brand, products or services to a famous professional athlete. This may entail significant media exposure while targeting a specific segment of the public. This was what lululemon had in mind when it partnered with Connor Bedard, the most recent #1 draft choice in the National Hockey League (NHL). The company, which started out selling yoga wear, is now reaching out to hockey fans in a bid to strengthen its reputation as a top-of-the-line sports apparel retailer. In the run-up to the NHL draft, the name of Connor Bedard—a once-in-a-generation talent—was on everyone’s lips. His endorsement deal with lululemon was announced a few days before the draft, thanks in part to a video in which he said: “If I make this shot, I’ll join lululemon as their newest ambassador.” He then executed a perfect shot, adding a dramatic note to the announcement (Video 1). Video 1: Announcement marking the sponsorship agreement between lululemon and Connor Bedard. Following the partnership announcement, Connor Bedard said: “Being from Vancouver, I’ve been a fan of lululemon for as long as I can remember. The gear is so comfortable, stylish, and great for training.”5 Since the company was founded in Vancouver, it is understandable that this partnership is seeking to capitalize on a shared sense of belonging. Obviously, sponsors are also seeking to boost their sales or profitability via increased exposure and visibility derived from a sponsorship deal. Gaining access to a specific target audience heavily engaged in the athlete’s chosen sport can be a major selling point. HOW SPONSORSHIP AGREEMENTS ARE STRUCTURED As regards structure, sponsorship agreements differ in terms of the breadth and scope of the visibility being sought. Structure of local sponsorship agreements Local sponsorship agreements are entered into when: A local company decides to fund an athlete or a sports event. A company sponsors a local athlete or a local sports organization. A local sponsorship agreement does not necessarily mean a smaller-scale deal. RBC’s and Air Canada’s sponsorship arrangements, under which their respective logos are featured on Montreal Canadiens jerseys, are examples of local agreements (Figures 7 and 8). Figure 7: The Montreal Canadiens team jerseys now feature the logos of RBC and Air Canada. Structure of national or international sponsorship agreements Seeking much more extensive visibility, national or international sponsorship agreements are typically larger-scale initiatives. More sophisticated and with farther-reaching ramifications, these types of agreements must also take into account issues spanning multiple jurisdictions. Compensation structure In certain major agreements, the athlete’s financial compensation structure may vary widely. Fixed and pre-determined compensation is typically the norm. Understandably, agreements in which a trademark linked to an athlete is used for a specific product line may include royalties or tiers (thresholds) associated with the products’ commercial performance. Duration impacts the structure of sponsorship agreements Sponsorship agreements also vary in terms of their duration. A company may decide to sponsor an athlete for a lengthy period or for a one-time event or competition. On September 13 2023, the new Professional Women’s Hockey League (PWHL) announced its very first sponsor: Canadian Tire Corporation (CTC). Strictly speaking, this is an international agreement because the PWHL operates in both Canada and the US. At the time, Sarah Nurse, a forward with PWHL Toronto, said: “Through numerous conversations with their key leaders, it has always been clear that [CTC was] committed to supporting a women’s hockey league. It is no surprise that CTC is an inaugural partner now that we have launched the PWHL. With our shared values and vision, I know that CTC will continue to put women’s hockey at the forefront”6 (Figure 8). Figure 8: Sarah Nurse, who represented Canada at the Winter Olympics, will be playing in the PWHL, which recently signed a sponsorship deal with Canadian Tire. RISKS OF SPONSORSHIP AGREEMENTS: WHAT YOU NEED TO KNOW There are also a number of risks associated with signing a sponsorship agreement. Professional athletes are continually being placed under a microscope. Everything they do has a potential impact on their sponsors. Morality clause Consider the case of golfer Tiger Woods, who was embroiled in a personal scandal back in 2010 that left his reputation in tatters. Seeking to avoid being associated with this loss of reputation, various companies and organizations terminated their deals with him (Table 1). Table 1: List of sponsors that terminated or continued their involvement with Tiger Woods in the wake of his scandal. Today, Nike and Upper Deck are still associated with Tiger Woods, along with 10 new sponsors. To enable the parties to terminate agreements easily and at no charge should any situations akin to that of Tiger Woods arise, sponsorship agreements typically include a morality clause (also known as a “morals clause”). Morality clauses impose “good conduct” obligations on athletes and stipulate that if they engage in any actions that could tarnish or harm their own reputation or that of their sponsor, the sponsor has the right to suspend or unilaterally terminate the agreement. It was thanks to this clause that Gatorade and Gillette, to take only two examples, ended their agreements with Tiger Woods. The first morality clause in the sports world was included in the employment contract of Babe Ruth, the renowned baseball player with the New York Yankees in the 1920s. Reciprocal clause One might think that certain athletes would prefer to have a reciprocal clause in place enabling them to cut ties with any sponsor whose reputation is marred by scandal (inhumane work conditions, pollution, financial wrongdoing, etc.). Although less frequent, these clauses could still prove useful, especially now that society is calling on the corporate world to conduct itself more ethically. On the credit side of the ledger, an athlete who stands out positively off the playing field may end up attracting new sponsors. On September 24, 2023, the pop singer Taylor Swift was spotted at a Kansas City Chiefs game, cheering on tight end Travis Kelce (Figure 9). Given Taylor Swift’s unprecedented levels of public adulation, Travis Kelce saw his social networks explode with 500,000 more followers; sales of his jerseys soared by 400% in less than a week. Sponsors are well known for appreciating the value of athletes associated with another celebrity, e.g. Tom Brady and Gisele Bündchen, or David and Victoria Beckham. Kelce, who is already pocketing $3 million annually from his sponsorships, now has the door wide open for some shiny new deals. Figure 9: Taylor Swift (right) alongside Travis Kelce's mother at Arrowhead Stadium, home of the Kansas City Chiefs. Conclusion All in all, sponsorship agreements play a pivotal role in the sports world. Above and beyond the financial benefits they generate, they reflect the values and identity of the partners involved. Transcending transactional considerations, these deals have turned into alliances that stimulate growth, emotional engagement and long-term viability. They embody shared passions for sports and an ongoing quest for excellence. As the sports world evolves and new opportunities emerge, we should continue to question how these agreements align with our collective values. In the future, these partnerships will not just be a critical component of commercial strategies; they will also be statements of principle. And they will continue to shape how sports are lived, perceived and experienced. Chronique de Ray Lalonde, August 16, 2023 Link. Ouest-France, Neymar: “Peut-être que le championnat d’Arabie saoudite est meilleur que la Ligue 1”, September 8, 2023 Link. QMI Agency, Nouvelle alliance entre Félix Auger-Aliassime et Renault, TVA Sports, January 25, 2023 Link. Ryan Dabbs, Why don't Chelsea have a sponsor for their new kit?, FourFourTwo, July 19, 2023 Link. Matt Carlson, Conor Bedard signs… with lululemon, The Hockey News, June 28, 2023 Link. News release, Professional Women’s Hockey League, Canadian Tire Corporation joins the PWHL with a landmark multi-year agreement, September 13, 2023 Link.

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December 8, 2023

Publicity contests no longer regulated by the Régie des alcools, des courses et des jeux

On June 2, 2021, the Québec government reduced the administrative burden relating to international publicity contests by excluding them from the jurisdiction of the Régie des alcools, des courses et des jeux (the “Régie”). It has now followed suit with all types of publicity contests launched on or after October 27, 20231. In concrete terms, this means that businesses launching publicity contests aimed at Quebec participants after this date no longer have to meet reporting obligations or pay prescribed fees to the Régie. Businesses in all sectors of activity use the well-known marketing strategy of publicity contests to attract new customers and build customer loyalty. Quebec has long been sidelined because of the Régie’s distinct requirements in this respect. For businesses wishing to increase their visibility through such contests, the province’s situation is now equivalent to that prevailing in the rest of Canada. That said, contests launched before October 27, 2023, remain subject to previous requirements—namely the payment of prescribed fees, the posting of a security where required and the filing of a report with the Régie within 60 days of the date on which the winner(s) is (are) declared—if they offer prizes the total value of which exceeds $2,000. We advise you to be careful, however. Despite the eased burden we have mentioned, publicity contests in Quebec must still comply with the requirements of the Criminal Code,2 the Competition Act,3 the Consumer Protection Act4 and the Charter of the French Language,5 as well as applicable privacy, labelling and advertising laws. Bill 17, An Act to amend various provisions for the main purpose of reducing regulatory and administrative burden, S.Q. 2023, chapter 24, sections 75 and following. RSC 1985, c. C-46. RSC 1985, c. C-34. CQLR, c. P-40.1. CQLR, c. C-11.

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November 27, 2023

The forgotten aspects of AI: reflections on the laws governing information technology

While lawmakers in Canada1 and elsewhere2 are endeavouring to regulate the development and use of technologies based on artificial intelligence (AI), it is important to bear in mind that these technologies are also classified within the broader family of information technology (IT). In 2001, Quebec adopted a legal framework aimed at regulating IT. All too often forgotten, this legislation applies directly to the use of certain AI-based technologies. The very broad notion of “technology-based documents” The technology-based documents referred to in this legislation include any type of information that is “delimited, structured and intelligible”.3 The Act lists a few examples of technology-based documents contemplated by applicable laws, including online forms, reports, photos and diagrams—even electrocardiograms! It is therefore understandable that this notion easily applies to user interface forms used on various technological platforms.4 Moreover, technology-based documents are not limited to personal information. They may also pertain to company or organization-related information stored on technological platforms. For instance, Quebec’s Superior Court recently cited the Act in recognizing the probative value of medical imaging practice guidelines and technical standards accessible on a website.5 A less recent decision also recognized that the contents of electronic agendas were admissible as evidence.6 Due to their bulky algorithms, various AI technologies are available as software as a service (SaaS) or as platform as a service (PaaS). In most cases, the information entered by user companies is transmitted on supplier-controlled servers, where it is processed by AI algorithms. This is often the case for advanced client relationship management (CRM) systems and electronic file analysis. It is also the case for a whole host of applications involving voice recognition, document translation and decision-making assistance for users’ employees. In the context of AI, technology-based documents in all likelihood encompass all documents that are transmitted, hosted and processed on remote servers. Reciprocal obligations The Act sets out specific obligations when information is placed in the custody of service providers, in particular IT platform providers. Section 26 of the Act reads as follows: 26. Anyone who places a technology-based document in the custody of a service provider is required to inform the service provider beforehand as to the privacy protection required by the document according to the confidentiality of the information it contains, and as to the persons who are authorized to access the document. During the period the document is in the custody of the service provider, the service provider is required to see to it that the agreed technological means are in place to ensure its security and maintain its integrity and, if applicable, protect its confidentiality and prevent accessing by unauthorized persons. Similarly, the service provider must ensure compliance with any other obligation provided for by law as regards the retention of the document. (Our emphasis) This section of the Act, therefore, requires the company wishing to use a technological platform and the supplier of the platform to enter into a dialogue. On the one hand, the company using the technological platform must inform the supplier of the required privacy protection for the information stored on the platform. On the other hand, the supplier is required to put in place “technological means” with a view to ensuring security, integrity and confidentiality, in line with the required privacy protection requested by the user. The Act does not specify what technological means must be put in place. However, they must be reasonable, in line with the sensitivity of the technology-based documents involved, as seen from the perspective of someone with expertise in the field. Would a supplier offering a technological platform with outmoded modules or known security flaws be in compliance with its obligations under the Act? This question must be addressed by considering the information transmitted by the user of the platform concerning the required privacy protection for technology-based documents. The supplier, however, must not conceal the security risks of its IT platform from the user since this would violate the parties’ disclosure and good faith requirements. Are any individuals involved? These obligations must also be viewed in light of Quebec’s Charter of Human Rights and Freedoms, which also applies to private companies. Companies that process information on behalf of third parties must do so in accordance with the principles set out in the Charter whenever individuals are involved. For example, if a CRM platform supplier offers features that can be used to classify clients or to help companies respond to requests, the information processing must be free from bias based on race, colour, sex, gender identity or expression, pregnancy, sexual orientation, civil status, age except as provided by law, religion, political convictions, language, ethnic or national origin, social condition, a handicap or the use of any means to palliate a handicap.7 Under no circumstances should an AI algorithm suggest that a merchant should not enter into a contract with any individual on any such discriminatory basis.8 In addition, anyone who gathers personal information by technological means making it possible to profile certain individuals must notify them beforehand.9 To recap, although the emerging world of AI is a far cry from the Wild West decried by some observers, AI must be used in accordance with existing legal frameworks. No doubt additional laws specifically pertaining to AI will be enacted in the future. If you have any questions on how these laws apply to your AI systems, please feel free to contact our professionals. Bill C-27, Digital Charter Implementation Act, 2022. In particular, the U.S. Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, October 30, 2023. Act to establish a legal framework for information technology, CQLR c C-1.1, sec. 3. Ibid, sec. 71. Tessier v. Charland, 2023 QCCS 3355. Lefebvre Frères ltée v. Giraldeau, 2009 QCCS 404. Charter of Human Rights and Freedoms, sec. 10. Ibid, sec. 12. Act respecting the protection of personal information in the private sector, CQLR c P-39.1, sec. 8.1.

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June 15, 2023

Team trademarks: naming the champions

Choosing the name of a sports team can be a perilous exercise. In addition to representing certain values, names are supposed to fire up the fan base and motivate the athletes themselves. It must sometimes meet with the approval of major sponsors. But when sports teams are companies seeking to profit commercially from the use of their brand, legal considerations also come into play. Team names are typically linked to the organization of sports events for which tickets are sold. They may also be associated with products such as caps or jerseys that fans take pride in wearing. In these respects, the team’s name is a trademark and does not only serves to differentiate a team from its competitors but can also help to fill a company’s coffers. Team names are often associated with logos that also embody certain values. Logos may incorporate various design features, in addition to the team name, and often displayed on a wide range of products. Trademarks in sports has given rise to various problems, as seen in the examples below. Trademark Confusion Do you remember when the Canadian Football League was home to the Saskatchewan Roughriders as well as the Ottawa Rough Riders? This type of situation is far from ideal when watching a game and from the point of view of trademarks, it is to be avoided, since it will probably be impossible for at least one of the two teams to register its trademark. Remember that trademark registrations generally grants national exclusivity. Similar nominal trademarks, however, are quite common among sports teams, particularly when different sports are involved. Examples include the New York Rangers (hockey) and the Texas Rangers (baseball), or the Florida Panthers (hockey) and the Carolina Panthers (football). This form of “nominal coexistence” might prevent one team from registering its trademark, especially if the description of the other team’s products and services is wide-ranging. For instance, if the description of the services provided by the first team to register its trademark includes the presentation of sports events or the sale of jerseys, without specifying the associated sport, there would then be a risk of confusion from the legal point of view between the two nominal trademarks. To register as a design mark which includes both the team’s name and a logo can sometimes resolve this problem if the teams’ logos are substantially different from each other. However, this will be ineffective if the design mark primarily consists of the team’s name. In that case, the Intellectual Property Office will consider the logo along with any accompanying text to assess the likelihood of confusion. A logo that does not include the team’s name is often easier to register, provided that it is different from the logos of other existing teams. The case of teams with the same name playing the same sport in different leagues is more complicated. Such situations often arise with minor league and major league hockey teams that have the same name. No problem arises when the minor league team is owned by the same business interests, since it is then easy to conclude a licensing agreement between the two and consolidate trademark ownership to only one company. On the other hand, such situations might also stem from a random choice of name or an unconscious desire to be associated with a major league team. At the very least, teams with the same name should consider signing a coexistence agreement. For example, on January 10, 2018, the U.S. Army’s parachute team, nicknamed the Golden Knights, filed a notice of opposition with the United States Trademark Trial and Appeal Board (TTAB) calling for the rejection of the trademark registration application filed by the NHL’s Vegas Golden Knights. Both teams ending up signing a coexistence agreement: the risk of confusion between them was perhaps more limited given the very different nature of their activities. In addition, team trademarks should aim to be distinctive and should not be limited to generic descriptions of the sport or the place where the team is based. Socially unacceptable trademarks Although they may be registered and legally valid from an intellectual property perspective, team logos or names may, however, be socially unacceptable. The notion of social acceptability actually evolves over time. Some trademarks that were used for years are no longer acceptable today. (Come to think of it, were they ever?) Take trademarks like Aunt Jemima or Uncle Ben’s, which, following decades of commercial use, were renamed to be less offensive. In the world of sports, one only has to think back to the former Cleveland Indians and their logo featuring “Chief Wahoo”. In the face of social pressure, the team dropped its logo and became the Cleveland Guardians. The same phenomenon has been observed in Canada: The Edmonton Eskimos, of CFL fame, became the Edmonton Elks after the organization acknowledged that its name could be offensive to the Inuit and other Indigenous peoples of Canada. In 2019, McGill University changed the name of its varsity sports teams from the Redmen to the Redbirds. This decision followed a referendum in which 78.8% of participating students voted in favour of the name change. In 2020, the Ahuntsic College Indians became the Eagles following a student vote. To protect their trademarks, sports teams must take into account evolving standards of social acceptability. Trademarks that avoid racial or discriminatory stereotypes are more likely to “stand the test of time”. One might wonder how much longer certain team names will last. In the NFL, the Kansas City Chiefs and the Minnesota Vikings both have names that play on stereotypes that have been contested for years. In the NHL, the same questions arise for the Chicago Blackhawks. While various communities are calling for a new name and logo, others insist that the name pays tribute to a real-life Native American. In Major League Baseball, the Atlanta Braves have faced similar scrutiny and social pressure. Team nicknames created by fans Certain team names were created by the fans themselves, not by the owners or the organizations involved. Take, for example, the “Habs” (Montreal Canadiens), the “Als” (Montreal Alouettes) or “Nos Amours” (former Montreal Expos). Are these nicknames the intellectual property of the fans that invented them? In fact, a number of these nicknames have been successfully trademarked in Canada: “Habs” has been a registered trademark since 2003 for entertainment services and since 2007 for merchandise such as clothing and other promotional items. “Als” has been a registered trademark since 2014 for all promotional items and entertainment services. “Barça”, the nickname of Barcelona’s professional soccer club (officially FC Barcelona), has been a registered trademark in Canada since 2022 for all promotional products. However, the French nicknames “Nos Amours” (Montreal Expos) and “La Sainte-Flanelle” (Montreal Canadiens) have not yet been trademarked in Canada, although applications for “Tricolore Sports” and “Bleu Blanc Rouge” were recently filed by the Montreal Canadiens. The issue that arises stems from sports teams taking the opportunity to trademark and protect nicknames that became distinctive thanks to widespread use by fans. Trademarks linked to a sponsor Sports teams might wish to adopt a name and /or a trademark that pays tribute to their owner or a major sponsor. One example that comes to mind is the Anaheim Mighty Ducks (now the Anaheim Ducks), which were originally named after the Disney-owned film franchise. This situation is not problematic per se since two separate companies were involved. However, things can get tricky if relations with sponsors become tense or if they decide to withdraw their sponsorship. For that reason, an agreement should be in place setting out the sponsor’s trademark rights and, if the sponsorship comes to an end, how quickly the team has to change its name and trademarks. Departing sponsors should also be prevented from interfering in the management of the team. Teams should also reserve the right to change their names and trademarks for various reasons, including reputational risk. And if a sponsor sells sports equipment or other team-related products, teams should ensure that they can sell their own promotional products without infringing the sponsor’s trademark. If not contractually regulated, such situations could even affect the validity of the sponsor’s registered trademarks since the sponsor would not exercise adequate control over the trademark. The issues outlined above might not just affect the company’s image, but could also prevent it from adequately protecting its trademark. A registered trademark ensures nationwide protection; it may also cover multiple countries if applications are filed outside Canada. Above all, trademark registration provides a greater degree of legal certainty. This also greatly facilitates intervention against malicious actors seeking to counterfeit—and profit from—registered trademark and, in many cases, serves to block imports of counterfeit merchandise. From the outset, sports teams that wish to profit commercially from their brand should check at the outset whether it can be registered as a nominal and/or design trademark. If it cannot, they are advised to work closely with their legal teams and trademark agents to find an alternative name or logos that are not affected by the above-mentioned issues.

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