Intellectual Property Considerations For Brands Sponsoring Sporting Events

Introduction

Every year on April 26, the World Intellectual Property Organization (“WIPO”) marks World IP Day to spotlight the role of Intellectual Property (“IP”) rights in driving innovation and commerce. This year’s theme, “IP and Sports: Ready, Set, Innovate!”, underscores the central role IP plays in the sports industry, particularly in fostering technological, design, and creative innovation. It also highlights the importance of sports sponsorship as a key commercial mechanism for leveraging and monetizing these rights.

Far from bein g mere marketing exercises, sports sponsorships are structured commercial transactions in which IP rights, ranging fr om trademarks and event branding to image rights, are often the primary value drivers. Thus, sponsoring brands must understand how those IP rights are allocated, used, and protected, and ensure their agreements are properly negotiated to capture every IP right their brands need to enjoy before, during, and after a sporting event.

IP Rights in Sports Sponsorship

The main IP rights at play in sponsorship arrangements are:

1. Trademarks: Event names, logos, and associated marks are some of the most commercially significant IP rights. Registration under the Trademarks Act is a prerequisite for infringement proceedings by the mark owner. A sponsor, therefore, cannot independently maintain an action. However, where the event/IP owner assigns the marks/logo, a sponsor can enforce its rights. A well-known example of trademarks in sports is the AFCON logo and the FIFA World Cup marks, which are extensively licensed to official sponsors.
2. Copyright: Copyright typically protects sports broadcast footage, event photography, and promotional materials. Copyright in these works arises automatically upon its creation, and sponsors are granted the right of use and exploitation under a licensing agreement, usually for a specified duration.
3. Industrial Designs: This protects the visual appearance of branded merchandise and packaging.
4. Image Rights: Image rights refer to an athlete’s name, likeness, and signature, etc. all of which have commercial value in their own right. Whether these rights are included in an event sponsorship agreement depends on the specific terms negotiated between the parties; they are not automatically granted as part of such an arrangement.

Intellectual Property Considerations for Brands Sponsoring Sporting Events

Extracting Value from the IP Rights Granted

Sponsors extract value through brand visibility, exclusivity, content leverage, and co- branding. All of these uses must be expressly covered in the sponsorship agreement. Sponsorship agreements typically grant limited rights to use the IP by way of licences, while the event owner retains ownership of the underlying IP. If a use is not expressly written in the sponsorship agreement, it is not granted.

The Key Risks Sponsors Face

1. Ambush Marketing: This occurs when a non-sponsor creates the impression of an official association with an event, diluting the exclusivity the official sponsor paid for. Nigeria has no dedicated legislation on the subject. Trademark infringement actions can be brought by the event owner or sponsor (where marks are registered) and the common law action for passing off (where marks are not registered). Where an event is short-timed, a prompt cease-and-desist letter is often the most practical remedy, as litigation timelines will outlast the event. For longer events, injunctive relief becomes more viable.
2. Athlete Image Rights: Sponsoring a team or event does not automatically grant the right to use individual athletes in campaigns. Athletes own their image rights and may have already licensed them to a competitor. Separately, the Copyright Act 2022 confers performers’ rights on athletes, including the right to control the recording, reproduction, and broadcast of their performances. A separate written agreement is usually required in each case, unless the sponsorship agreement expressly gives the sponsoring brand the right to feature individual players or athletes in its campaigns or use their image rights.
3. Digital and Online Activations: Sharing or reposting event footage online without an express licence is a copyright infringement. Criminal penalties include substantial fines and up to five years’ imprisonment for commercial unauthorised use. All authorisations to use audiovisual or broadcast content must be in writing.

What Brands Should Do

1. Before signing any deal, confirm that the event owner’s IP rights (save for copyrights) are validly owned, registered, and protected.
2. Negotiate agreements that expressly cover every planned use: advertising, digital content, post-event campaigns, and athlete features.
3. Document all IP licences in writing.
4. Engage IP counsel at the deal stage, not after a dispute has arisen. That single step remains the most cost-effective protection a brand can secure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.