Penn State Setback in Vintage Brand Lawsuit Could Shake Sports Industry

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Trademark law has disrupted name changes for the Washington Commanders and the Cleveland Guardians, and now a new court ruling challenges longstanding assumptions about trademark protection for logos, symbols and other marks that distinguish sports teams. At issue is whether consumers view school marks on apparel and merchandise as a method of expressing support for their school or whether they believe those marks identify the school as the products’ source.

On July 14, Judge Matthew Brann denied Penn State’s motion to dismiss a counterclaim brought by Vintage Brand, an online retailer of vintage T-shirts, throwback hats, retro tees and similar products associated with sports teams. Penn State offers a more critical description of Vintage, blasting it as a “serial infringer” that “blatantly uses its website to sell infringing merchandise from many colleges and universities.”

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Penn State isn’t alone in suing Vintage. Arizona, Arizona State, Colorado, Oregon, Purdue, UCLA, USC, Utah and Washington are among plaintiffs in other cases presenting the same basic grievance.

Vintage unabashedly sells Penn State-associated products without a license agreement or permission from Penn State. Penn State’s complaint, filed last year in a Pennsylvania federal district court, contains assorted screenshots of Vintage’s website selling Penn State-related products:

The university emphasizes that Vintage uses—illegally, the school says—the Penn State name as well as its popular lionhead logo, the Nittany Lion logos, the Pozniak Lion logo, and the Penn State seal.

Penn State’s complaint includes claims for trademark infringement, trademark dilution, counterfeiting and unfair competition. The university insists its trademarks are being brazenly infringed by what it says are “counterfeit Penn State-branded clothing and accessories.”

Slam dunk case? Not so fast.

Vintage doesn’t dispute the obvious, that it’s using Penn State-related properties. Instead, it claims it has a right to do so. Vintage says its use of marks “is purely ornamental” and “for mere decoration.” These marks, the company says, do “not serve to identify Penn State as the source or origin of the goods.” In other words, consumers might not believe that Penn State is behind these goods. Trademark protection is generally appropriate for identifying the source of the goods so that consumers aren’t confused.

Vintage also says it draws from “historic public domain works of art that incidentally contain within them text or a design to which Penn State claims trademark rights.” The company furthered its defense by countersuing Penn State, asserting a group of school trademarks should be canceled in part because relevant images and logos are now in the public domain. When consumers see Penn State logos on Vintage’s mugs, shirts and other merchandise, Vintage believes they simply see a way of expressing support for the school.

Penn State flatly disagrees. The school writes “it would be unimaginable that using PENN STATE, the University, or the Pozniak Lion Logo on a good, no matter how prominently, could be perceived by the consuming public as anything other than an identification of Penn State as the source or second source.”

Penn State motioned to dismiss one of four counterclaims. Brann wrote the question before him was, “does a symbol identify the source of the goods if it merely creates an association between it and the trademark holder?” To Penn State’s dismay, the judge—a Penn State Dickinson Law grad—concluded it does not.

To be clear, Brann’s ruling doesn’t determine the outcome of the case, which is in an early stage of litigation. Brann only determined that Vintage has presented a claim that is plausible on its face, shouldn’t face swift dismissal, and warrants further review, including through pretrial discovery and survey data on consumer perceptions. Penn State could still defeat the claim and win the case, and could appeal a loss to the U.S. Court of Appeals for the Third Circuit.

Still, Brann’s ruling is significant because it could eventually weaken protection for college athletic programs, and possibly pro teams, if team properties can be used by others without consent.

In a lengthy and sometimes-theoretical discussion that draws on law review articles and IP treatises, Brann wrote that “our modern trademark regime has struggled” with unpacking the associations created by marks. He suggested that trademark law has crept beyond original goals, which are to help sellers cultivate reputations and assure consumers they’re buying the genuine article.

This body of law, Brann critically observed, has become reflexively protective of businesses, including sports teams. “Trademarks,” he stressed, “are not protected to dole out economic awards to the party in the case caption that is most deserving; nor are they protected to encourage entities to seek more of them.”

Brann also voiced concern about reading too uncritically into consumers’ confusion about a source. He cited a treatise, which contained data indicating a “widespread” and erroneous “belief among consumers” that “no product can bear the name of an entertainer, cartoon character, or some other famous person unless permission is given for its use.”

He added, “if consumers’ confusion stems from their incorrect belief that goods bearing Penn State’s emblem must be licensed, shouldn’t that belief be corrected, not perpetuated?”

Going forward, Brann wants the parties to identify the percentage of consumers who are genuinely confused about the source of Vintage’s products and whether that confusion “stems from their belief that the law requires Penn State’s permission.” Brann acknowledged these questions are fundamental to a “modern collegiate trademark-and-licensing regime has grown into a multibillion-dollar industry.” But he warned that big dollar figures aren’t the relevant metric in legal analysis.

“A house [being] large,” Brann surmised, “is of little matter if it’s been built on sand.”

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