By: Caldwell

Many professional athletes know the benefits of using their name, image, and likeness (“NIL”) for commercial purposes. For many, this serves as a lucrative enterprise outside their actual sporting arena where athletes, for instance, may use their image to promote/endorse a product.[1] However, profiting from one’s NIL has been forbidden by rules applicable to college athletes as a form of financial compensation for athletic activity. Recently, a lot has been publicized about the upcoming changes to the National Collegiate Athletic Association (“NCAA”) bylaws surrounding NIL. In general, NIL are three elements related to the legal concept of right of publicity, a doctrine dating to the 19^th century when it was introduced in a Harvard Law review article written by Louis Brandeis and Samuel Warren.[2] The right of publicity allows anyone to commercialize their NIL and/or prevent unauthorized use for commercial purposes of their NIL.

Common examples of NIL in the professional sports space include the usage of an athlete’s name on a jersey for sale, an athlete making an appearance on a commercial or advertisement, and a computer-generated image of an athlete appearing in a video game. However, unlike their professional counterparts, college athletes have never had an opportunity to earn money from their name, image, and likeness. However, as of July 1^st 2021, depending in state’s NIL laws, all NCAA athletes are allowed to make money from a wide variety of business ventures without losing their eligibility.

This post will discuss what potential considerations would need to be addressed regarding intellectual property, more specifically trademarks, as athletes venture to market their NIL to generate revenue.

Legal and Legislative History Involving the NCAA and NIL

There is no federal statue directly governing NIL, and so its history has been driven by state laws and federal court decisions sounding in antitrust law. For instance, in the 1984 opinion in National Collegiate Athletic Ass’n v. Board of Regents of the University of Oklahoma, the Supreme Court struck down a proposed television plan proposed by the NCAA as anticompetitive, but in doing so, it also gave the NCAA latitude to maintain “a revered tradition of amateurism in college
sports.” [3]  The NCAA has maintained that antitrust law permits them to eliminate any sort of athlete compensation to promote competitive equity and to distinguish college athletics from professional sports.

In 2009, Ed O’Bannon, a former UCLA men’s basketball player, filed a lawsuit against the NCAA and the Collegiate Licensing Company for the use of his likeness in the popular EA Sports video game NCAA Basketball 09. In 2014, the District Court ruled in favor of O’Bannon, which led to the discontinuation of the college sports-themed EA video games, intensifying the conversation regarding the compensation of student-athletes for use of their NIL.[4]

More recently, in June 2021, the Supreme Court issued an opinion in National Collegiate Athletic Association. v. Alston.[5] Current and former student-athletes brought this antitrust lawsuit challenging the NCAA’s restrictions on compensation. The Court’s unanimous decision, written by Justice Neil Gorsuch, upheld a district court order enjoined the NCAA from enforcing limits placed on education-related benefits which include certain types of academic scholarships and related educational benefits provided by member schools to student athletes. Under the “Rule of Reason” [6] approach, the Court determined that the NCAA rules regarding limitations on educational benefits had an anticompetitive effect. [7]  The Court noted that the student athletes showed that the NCAA could maintain a distinction between college and professional sports (the “tradition of amateurism” referred in Board of Regents of the University of Oklahoma case) with substantially less restrictive alternative rules related to educational benefits.[8] The strongest statement against any compensation questions by the NCAA came on Justice Kavanaugh’s concurrence, which stated that “the NCAA’s current compensation regime raises serious questions under antitrust laws.” [9]  Moreover, any future antitrust question regarding compensation of athletes should be resolved using the “Rule of Reason” standard as opposed to any more lenient standard. [10]

The Supreme Court opinion in the Alston case and Justice Kavanaugh’s concurrent opinion are at the center of current litigation related to NIL. In Johnson v. NCAA, a case in Pennsylvania federal court centering on whether college athletes are owed minimum wage protections, the presiding judge, John Padova, has asked the players and NCAA to file briefs explaining to what extent, the Alston ruling impacts their case. [11]

In another high-profile case, Oregon basketball player Sedona Prince has sued the NCAA seeking class certification in a case where she maintains denial of NIL violated antitrust laws, potentially leading to many millions of dollars in damages to athletes. [12] It is worth noting that the Prince’s case is before Judge Wilken, who not only handled Alston but also presided over Ed O’Bannon’s successful case against the NCAA. [13]

Besides the judiciary, state legislatures are enacting laws to enable athletes to receive compensation for their NIL. In September 2019, California became the first state to pass legislation to create a legal right for college athletes to be compensated for the commercial use of their identities. The “Fair Pay to Play” Act, which becomes effective in 2023, guarantees college athletes a right to profit from their identities. The Act also authorizes college athletes to hire agents and other representatives to assist them in negotiating and securing commercial opportunities.[14]  This July 1^st, laws allowing college athletes to earn money from use of their NIL became effective in some states such as Alabama, Colorado, Florida, Georgia, Illinois, Louisiana, Mississippi, New Mexico, Ohio, Oregon, Pennsylvania, and Texas. [15] Other states have taken the initiative as well and passed similar laws which are set to take effect within the next four years. [16]

NCAA changes to NIL

On June 30, 2021, the governance bodies for NCAA Division I, II, and III sports adopted a uniform interim policy suspending NCAA name, image and likeness rules for all incoming and current student-athletes in all sports.[17]  The interim policy includes guidelines, such as [18]

• Individuals can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities may be a resource for state law questions.

• College athletes who attend a school in a state without an NIL law can engage in this type of activity without violating NCAA rules related to name, image and likeness.

• Individuals can use a professional services provider for NIL activities.

• Student-athletes should report NIL activities consistent with state law or school and conference requirements to their school.

As mentioned before, currently state law applies to NIL statutes which could lead to confusion for student-athletes as different rules may apply in different states. The NCAA has engaged the United States Congress to persuade Congress into enacting a federal NIL statute.

Intellectual Property and NIL

For many college athletes, this area of commercializing their NIL is new to them. Because of the volume of athletes that will take advantage of changes to NIL by the NCAA, commercialization of NIL will become a very competitive space for the athletes. Athletes will be now eligible to monetize their social media accounts, sign autographs, coach camps, and participate in advertising campaigns. As such, athletes should protect their brands through an effective trademark strategy. There are multiple aspects of an athlete’s NIL that can receive the benefits of trademark protection; these include, but are not limited to, the athlete’s name, logo, or slogan.

The athlete’s name is likely the first thing anyone will recognize and potentially associate with a product or brand, and most likely, the most important one in terms of requiring protection. A sound trademark strategy surrounding the athlete’s name would not only allow a student athlete to control how their name is used commercially, but also, it may be used to deter and to defend against unauthorized use of the name. It is important to note that, since a trademark needs to be used in commerce, applying for a trademark just with a defensive intent is not good enough.[19]

Protecting a logo or a slogan gives the student-athlete the exclusive right to use, produce, copy, and profit from it. Something an athlete may say which is fairly known to fans may be used potentially in a branding campaign for the athlete. In addition, a logo makes it possible to connect, for example, a particular athlete’s logo to what a company does. For example, most people will connect the logo shown below (Registration 5,284,247) to Tom Brady (former quarterback of the New England Patriots and currently playing for the Tampa Bay Buccaneers) and his “TB12” health-related business.

By applying for a trademark for a logo, the athlete decides where the logo appears, how the logo is updated or amended, and which parties may license it for use in their own materials.

Last Remarks…

The changes to NIL bylaws by the NCAA will bring many opportunities for student athletes to commercialize their name, image, and likeness.  However, this commercialization process can be complex and challenging. Filling the appropriate trademarks will provide the necessary protection for an effective and lucrative branding campaign. Besides agents and public relations specialist, student athletes should engage a trademark attorney as part of their team, who can provide guidance regarding how to develop a trademark strategy to protect and commercialize their brand.

[1] https://youtu.be/ITDFgsRIryg

[2] Samuel D. Warren and Louis Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193, 195 (1890) (“Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual … the right ‘to be let alone’ …”)

[3] National Collegiate Athletic Ass’n v. Board of Regents of the University of Oklahoma, 468 U.S. 85, 120 (1984)

[4] O’Bannon v. NCAA , 7 F. Supp. 3d 955, 962-63 (N.D. Cal. 2014)

[5] National Collegiate Athletic Association. v. Alston, 594 U.S. ___ (2021)

[6] Chicago Board of Trade v. United States, 246 U.S. 231 (1918)

[7] National Collegiate Athletic Association, 594 U.S. ___ at 22

[8] Id. at 4

[9] Id. at 42 (Kavanaugh, J., concurring)

[10] Id. (“After today’s decision, the NCAA’s remaining compensation rules should receive ordinary “rule of reason” scrutiny under the antitrust laws”)

[11] https://www.sportico.com/law/analysis/2021/supreme-court-ruling-alston-1234632592/

[12] Id

[13] Id

[14] Collegiate athletics: student athlete compensation and representation Cal. S. SB-206 (2019-2020), Chapter 383 (Cal. Stat. 2019).

[15] https://theathletic.com/2580642/2021/07/01/name-image-and-likeness-nil-what-it-means-why-it-matters-and-how-it-will-impact-college-sports/

[16] Id

[17] https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy

[18] Id

[19] 15 U.S.C § 1527