Sports

University of Arkansas Has Unique NIL Prohibition

Their policy prohibits athletes from using school colors with their NIL deals. Can this be challenged?

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(Image via Getty)

College athletes around the country can now start earning money from deals that use their names, images, and likenesses (NIL), but there are certain restrictions on such use, whether it be based on a state having a NIL law or a school adopting a NIL policy. Sports business reporter Darren Rovell revealed that the University of Arkansas’ NIL policy is unique in that it prohibits athletes from using school colors with their NIL deals. Would Arkansas have a colorable argument if it is challenged?

In 2008, the Fifth Circuit released an opinion in Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v Smack Apparel Co., 550 F.3d 465, upholding summary judgment to four universities — Louisiana State University (LSU), the University of Oklahoma (OU), Ohio State University (OSU), the University of Southern California (USC) — and Collegiate Licensing Company (the official licensing agent for the schools) for trademark infringement based on a company’s use of school colors. The court held that a color scheme is protectable as a trademark when it has acquired secondary meaning and is nonfunctional. Furthermore, in that case, it was held that the color schemes combined with other identifying indicia that referred to LSU (purple and gold), OU (crimson and creme), OSU (scarlet and gray), and USC (cardinal and gold) established secondary meaning of identifying the universities in the minds of consumers as the source or sponsor of the products at issue.

The court found that Smack Apparel’s use of the color schemes along with other identifying indicia created a likelihood of confusion as to the source, affiliation, or sponsorship of the shirts it was selling, which was sufficient to establish trademark infringement. It based such an opinion on the universities using their color schemes for more than 100 years, use of the school colors by Smack Apparel with the intent of identifying the universities, and Smack Apparel’s failure to conspicuously display its logo to separate the products from the universities in the minds of consumers, among other factors.

Furthermore, the court was not convinced that use of the color schemes should be considered a fair use of unregistered trademarks. Additionally, the fact that the color schemes were unregistered did not serve as a bar to the plaintiffs prevailing because ownership of trademarks is established by use, not by registration.

Will color scheme trademark infringement claims always hold up against a challenge? Absolutely not, and the specifics of each case will control. However, brands and athletes entering into NIL deals should be cognizant of the fact that universities have litigated based on use of their color schemes and is precedent that they can rely upon in their favor.

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Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.

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