Nothing LINsane about registering your brand as a trade mark

Tuesday 13 March 2012

The NBA has found itself a new fairytale in the form of Jeremy Lin, a 6ft 3in point guard who is a decedent of the lesser known basketballing nation of Taiwan.

In a matter of weeks Lin went from a basketball player twice cut by other NBA teams, sleeping on his brother’s sofa, to achieving the prestigious accolade of NBA player of the week. The hype that has ensued has coined the tagline “LINsanity” as an estimated 3m viewers are tuning in to watch each of his games back home in his native Taiwan.

The first player of Taiwanese descent to play basketball in the NBA has sought to trade mark the term “LINsanity”, used to characterise his meteoric rise to NBA fame. There are four other known applicants fighting for the rights to the catchphrase, two of which filed their application before Lin.

Lin’s legal team are currently seeking to enforce his intellectual property rights ensuring they maximise as much financial remuneration from the explosion of merchandise bearing the “LINsanity” catchphrase.

The ‘Godfather’ of registering their name as a Trade mark is our very own resident American, David Beckham, who has done so in almost every territory across the globe. Perhaps the greatest catalyst for his move from European giants Real Madrid to LA Galaxy centred around the former club’s policy of dividing their ‘Galacticos’ endorsements relating to image rights 50:50 between the  club and the player.

Negotiations broke down between Real Madrid and Beckham as he sought to gain complete control of his commercial income. Real Madrid’s fan base at that time was estimated to be in the region of 0.5b worldwide, with Beckham 23 replica shirts the must have item. Beckham instead took his brand to America where his guaranteed salary of $32.5m over 5 years was eclipsed by the $217.5m which was amassed through his intellectual property earnings in a total deal reported to be worth $250m.

The current practice among the Premiership footballers is that they have two contracts between themselves and their respective club. One contract is for their basic salary and the other is for their image rights (earnings from replica shirts and other merchandise). Players are taking advantage of a tax loophole by having their royalties for image rights paid into a company such as Beckham Brand Ltd where they are only liable for 28% corporation tax rather than the 50 per cent income tax which they are subject to in their contract which corresponds to their basic salary.

Wayne Rooney has put himself on HMRC’s radar by taking out £1.6M in loans from his company and paying a meager 2% tax which is regarded as a benefit in kind. Following a report compiled in November for the UK treasury, Finance Minister George Osborne is expected to propose a general anti-avoidance rule (GAAR) in an effort to deter such ‘abusive’ tax avoidance.

It is clear to see that correctly registering a trade mark for a sport’s star is the only way to ensure the owner enjoys the exclusive financial benefits from marketing their own image rights.

If you wish to find out more about registering trade marks and licensing the use of such trade marks then why not contact our Sports Law team.