Common Law Trademarks, Pawn Shops, and NIL?
The Federal Circuit decision in Dollar Financial v. Britexx published today digs into the framework that applies when a common law (unregistered) trademark right goes up against a registered trademark - and wins. The opinion is worth a read for trademark litigators and, as I’ll explain further below, sports lawyers.
Dollar Financial registered the “Money Mart” trademark way back in the 80s for its loan financing and check cashing businesses. In the 90s, Britexx started using “Money Mart Pawn” and “Money Mart Pawn & Jewelry” for its pawn shop businesses. Brittex never registered a trademark for “Money Mart,” and Dollar Financial didn’t try to stop its use of the phrase. In 2013, however, Dollar Financial registered two “Money Mart” marks seeking to include pawn shops as a covered service. Britexx petitioned to cancel those registrations in part based on its confusingly similar prior use of the mark. The Trademark Trial and Appeal Board agreed with Britexx, and yesterday, so did the Federal Circuit. In doing so, the Court confirmed that the “expansion doctrine” only applies defensively – so while pawn shop services may be a logical expansion of check cashing related services, that argument could only be used to block Britexx’s own registration, not offensively to defeat Britexx’s common law rights.
The existence of such strong common law trademark rights in the U.S. is an interesting wrinkle in the recently exploding field of student-athlete NIL rights. In conversations with student-athletes and sports lawyers outside of the U.S. I’ve heard confusion and debate about a broad range of related issues; from why anyone would have to register their own name with the government, to understanding the scope of unregistered trademark rights, to written consent requirements, licensing agreements, and more. Adding to the complexity, NIL rules still vary by state, NCAA rules continue to evolve, the application of Title IX remain unsettled, and Congress continues to ponder nationwide legislation.
Against this chaotic backdrop, the rise of NIL opportunities has required athletes and brands alike to navigate trademark laws in ways that were previously less critical. There can be no doubt that trademark litigation will play an increasingly significant role in these efforts. Disputes surrounding the protection and development of student-athletes’ personal brands are likely to arise even well after they are no longer students. And that litigation is likely to be particularly challenging, involving agreements with multiple entities (sponsors, marketers, etc.) each trying to establish exclusivity, as well as the cross-border, multi-jurisdictional implications resulting from the use of global online platforms and social media. So, while the flexibility of U.S. common law trademark rights may be attractive and a potentially helpful safety net, the earlier a promising student-athlete can get guidance from experienced counsel, the better. Preventing disputes from developing through clear contract terms and early trademark registrations will not only help avoid costly litigation but can also lay the foundation for increasing long-term profits and developing new opportunities.
Tl;dr: As global sports law continues to evolve, understanding the intricacies of trademark law will be crucial for athletes looking to manage their personal brands in an increasingly commercialized and competitive environment.