Colleges Win Suit Against T-Shirt Manufacturer

    
November 9th, 2006

FEDERAL COURT HOLDS THAT SCHOOL COLORS ARE PROTECTED UNDER TRADEMARK ACT

Smack Apparel Company (Smack), a manufacturer of printed shirts, produced several types of shirts related to the 2004 Sugar Bowl and the national football championships won by Southern Cal and Ohio State. The specific shirts Smack produced were:

+ A purple and gold color shirt with "Beat Oklahoma!" on the front, and, on the back, "Bring It Back to the Bayou!" and "National Champions."
+ A purple and gold color shirt with the words "2003 College Football National Champions" on the front and "Sweet As Sugar" on the back.
+ A crimson and crème color shirt and the words "BOUrbon Street or Bust" on the front and "Show Us YOUr Beads" and "Sweet As Sugar" on the back.
+ A crimson and crème color shirt with "Let's Make It Eight!" on the front, and "Beat Socal!" on the back
+ A scarlet and gray shirt that read on the front "Got Seven?" and, on the back, "We Do! 7 Time National Champions!" with a map of the state of Ohio with a star indicating the city of Columbus.
+ A cardinal and gold shirt that read on the front "Got Eight?" and, on the back, "We Do! 8 Time National Champions!" with a map of California and a star indicating "SoCal".

Louisiana State University (LSU), the University of Oklahoma (OU), Ohio State University (OSU), the University of Southern California (USC), and the Collegiate Licensing Company (CLC)--the official sports licensing arm for member institutions of the NCAA--became aware of the shirts through their marketing by vendors near campus on game days and in New Orleans immediately prior to the 2004 Sugar Bowl.

LSU joined with the three other schools and the CLC to sue Smack, claiming that the shirts violated the respective schools' trademarks because Smack never obtained a license from CLC to manufacture and market the shirts. The universities alleged that even though the shirts did not specifically and explicitly mention the universities or their mascots--the Tigers, the Sooners, the Buckeyes, or the Trojans--the shirts utilized the schools' official colors to give consumers the false impression that they were shirts that were officially sanctioned by those schools and to capitalize on the time, effort, and money that the universities spent on developing a well-known color scheme.

The federal Lanham Act governs the use of trademarks in the United States. A trademark, which can take the form of words or symbols, grants the trademark's owner the exclusive right to use such words or symbols to designate a particular good or service. A trademark, in short, is an adjective which designates the origin or source of a good or service.

The Lanham Act prohibits the use of "any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading depiction of fact, or false or misleading representation of fact" which is "likely to cause confusion, or cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities." In other words, a trademark violation occurs when a provider of a good or service to consumers uses some sort of symbol or word that is similar to a trademark so that consumers falsely believe that the good or service was provided by, or in some way affiliated with, the owner of the trademark.

The federal court in New Orleans noted that it is long-standing federal law that a color scheme can serve as a trademark "if it identifies and distinguishes a particular brand" by presenting a "secondary meaning." Under federal law, a particular good or service acquires a "secondary meaning" when "in the minds of the public, the primary significance of a trademark is to identify the source of the product and not the product itself." In this case, for example, a purple and gold color scheme on the shirt has a "secondary meaning" if it identifies that a shirt is produced or authorized by LSU and not merely that it is a shirt.

The federal courts have established a seven-factor test to determine whether something, such as a color scheme, has acquired "secondary meaning" and thereby become a trademark: The seven factors which comprise the "secondary meaning" test are: (1) length and manner of use of the mark, (2) volume of sales, (3) amount and manner of advertising, (4) nature of use of the mark in newspapers and magazines, (5) consumer survey evidence, (6) direct consumer testimony, and (7) an infringer's intent in copying the mark.

The court first noted that the four universities established their official color schemes over a century ago--LSU in 1893, OU in 1895, OSU in 1878, and USC in 1895--and that each of these universities sells dozens, if not hundreds, of items which bear the university's color scheme and that sales reach into the tens of millions of dollars each year. OSU's Assistant Director of Trademarks and Licensing stated to the court that officially-licensed OSU items bearing its scarlet and gray color scheme account for over $50 million per year in gross revenue. The court continued its analysis by finding that the four universities "advertise items with their school colors in almost every conceivable manner," and that newspapers and magazines often simply use the school colors in reference to a certain school. In particular, the court noted that LSU, and both national and local media, refer to the university itself, as well as its athletic teams, as the "Purple and Gold." Finally, the court took notice of the fact that Smack readily admitted to the court that it chose those particular colors for the shirts "in order to refer to the universities," although, Smack claimed, it did not intend to confuse consumers into thinking that the four universities had manufactured or authorized the shirts. Accordingly, the court concluded that the color schemes had acquired "secondary meaning" and were, therefore, protected as trademarks.

In order to determine whether the Lanham Act had been violated, the court then had to determine whether Smack's actions in using the color schemes caused "likelihood of confusion" between those goods produced by Smack and those officially produced or licensed by the respective universities. In order to make this analysis, the federal courts must analyze the "seven digits of confusion." These "digits"--or factors--are (1) the type of mark allegedly infringed, (2) the similarity between the legitimate and the infringing marks, (3) the similarity of the products and services offered by the mark owner and the alleged infringer, (4) the identity of retail outlets and purchasers, (5) the identity of advertising media used, (6) the alleged infringer's intent, and (7) any evidence of actual confusion among consumers. The "digits" are "a flexible and nonexhaustive list. They do not apply mechanically to every case, and can serve only as guides, not as an exact calculus."

Applying the "seven digit" analysis, the court determined (1) that the universities' marks "are extremely strong marks that have been used for decades," (2) the actual and infringing marks, i.e., the color schemes used by the universities and by Smack, are virtually identical, (3) Smack and the universities sell very similar types of apparel, and (4) Smack's shirts are sold in a similar manner to those that are officially licensed by the universities and are bought by the same consumers, (5) Smack advertised and made its goods available in locations similar to those utilized by the universities, and (6) Smack admitted that it chose the specific color scheme for the shirts in order to take advantage of those color schemes as identifiers of the four universities. The court therefore concluded that Smack had infringed on the four universities' trademarks pursuant to the Lanham Act.

The court entered judgment in favor of the four universities and the CLC.

The case is Board of Supervisors of the Louisiana State University and Agricultural and Mechanical College v. Smack Apparel Company, 438 F. Supp.2d 653 (E.D. La. 2006).