This article was first published by the International Trademark Association on inta.org
Manchester United, one of the world’s biggest football (soccer) clubs, has brought a claim for trademark infringement in the High Court of England & Wales over the use of the “Manchester United” club name within the video game Football Manager, and also, interestingly, over the non-use of its club crest. The suit is against Sports Interactive and Sega, the developer and publisher, respectively, of the well-known video game.
But what has prompted Manchester United to take action now, after almost 30 years of appearing in the game? This article considers the developing world of intellectual property (IP) licensing in the video game industry, and the potential impact this unique case may have.
The Rise of the Gamers
All around the world, it is clear that our love for sports video games is only increasing. In the European Union, sports games continue to rank among the highest-selling category of video games. FIFA, the football (soccer) electronic game series, continuously tops the charts, and this was well before we were all forced to find entertainment from the confines of our own homes. Younger generations are playing virtual sports games in increasing numbers. The emergence of esports and hugely popular tournaments such as the FIFA eWorld Cup means they are now also watching them in huge numbers. There is therefore huge potential for sports clubs to capitalize on this by licensing their IP into the games and tournaments.
Licensing the Lot
A large part of the attraction of sports video games is how close they can get to the real thing, both in the accuracy of the data and the simulation. With new versions of most sports simulation games typically released annually, developers strive for an ever-improving user experience. As part of this, some game publishers like EA Sports spend hundreds of millions of dollars on licenses of IP rights, from both sports clubs and the competitions in which they compete around the world, to make the game as lifelike as possible—including the use of the league and club names, club strips (jerseys), sponsors, stadiums, and even fan chants. These licenses offer another source of revenue for both governing bodies and clubs to commercialize their brands.
Players of FIFA and its rival, Pro Evolution Soccer, have grown accustomed to the fact that the games license IP, like the right to include real football clubs within the games—their names, kit, and real players. They have learned this because, historically, only one of these two games has had the rights to use the real names of clubs in any given league. Usually, FIFA has been the one with the rights to use most of the clubs’ names—Pro Evolution Soccer has, for example, had to use names such as “Man Red” instead of “Manchester United.” However, Juventus, Italy’s most successful football club, is currently in an exclusive partnership with Konami (the makers of Pro-Evolution Soccer), which grants Konami exclusive video-game licensing rights for Juventus. Therefore, in the latest version of FIFA, Juventus is called “Piemonte Calcio.”
Football Manager
In Football Manager, the gamer can manage every aspect of the team, including player selection, tactics, training, and even interaction with the media. Dating back to 1992, the game has a cult status among its fans. Its unrivalled database of player stats is so good that it is used by football clubs as a scouting resource.
However, while its whole experience is based on realism, Football Manager takes a very different approach to FIFA and Pro Evolution Soccer. It uses all the official English football club names but has never paid for licenses to do so.
After allowing this to happen for nearly 30 years, Manchester United is now claiming infringement of its trademarks for the MANCHESTER UNITED word mark (EU trademark no. 1333640) and its club crest (EU trademark no. 761312), both of which cover, among many other goods and services, “computer software” and “pre-recorded games on . . . software” in Class 9.
The Case
Claim 1: Infringement of the Club Name by Using It
Trademarks perform a number of functions, with the most important being that of a guarantee of the origin. The Court of Justice of the European Union (CJEU) has stated that, for a trademark to be infringed by affecting its ability to function as a guarantee of origin:
It must be established whether the consumers targeted, including those who are confronted with the goods after they have left the third party’s point of sale, are likely to interpret the sign, as it is used by the third party, as designating or tending to designate the undertaking from which the third party’s goods originate. Anheuser Busch v. Budejovicky Budvar NP, Case C-245/02 [2005].
The English High Court has previously held that the English Football Association’s “3 lions” trademark was not “used” by Trebor Bassett when it supplied, in packs of candy sticks, cards bearing photographs of England footballers wearing the England strip with the “3 lions” team badge. Trebor Bassett Ltd v. The Football Association [1997] F.S.R. 211. The judge held that there was no question of the trademark being used as an indication of the origin of the cards. While this case was decided before European trademark law on the various “functions” of a trademark had evolved—and as such its reasoning would now need to be treated with some caution—its core finding is consistent with subsequent CJEU decisions.
Even in cases where a defendant has deliberately applied trademarks to goods (that is, where the inclusion of the trademark is not merely incidental), there would be no infringement if the guarantee of origin function is unaffected. For example, it was held that the reproduction of the OPEL automotive trademark on toy cars would not be perceived by the average consumer as an indication that Opel had made the toy cars. CJEU in Adam Opel v. Autec, Case C-48/05 [2007].
Following this logic, for the use in Football Manager of the club name “Manchester United” to infringe the trademark, the average consumer would have to think that Manchester United was either responsible for the game, or (more realistically) had licensed the use of its trademarks within the game.
This is the unique aspect to this case: because no one would think that the game “originates” from Manchester United, it would seem likely that the only way that the football club could succeed is by showing that video game consumers have become so accustomed to such rights being licensed (as happens in FIFA and Pro Evolution Soccer) that they would assume, from the inclusion within the game of the team name (and so many “real” elements of the club—such as real player and staff names, the stadium name, and its red and white team colors), that Manchester United has endorsed that use.
Sports Interactive and Sega will no doubt argue that its game’s loyal players have a very different expectation when it comes to licensing than players of games like FIFA, and that they are simply using “Manchester United” to identify the team and increase the game’s realism.
In that regard, they can draw a parallel with a decision of the U.S. District Court for the Southern District of New York earlier this year, which held that the depiction of Humvee vehicles within the Call of Duty games, including the clear reproduction of the HUMVEE trademarks on those vehicles, did not infringe those trademarks. AM General LLC v. Activision Blizzard, et al., No. 17 Civ. 8644 (GBD) (S.D.N.Y. Mar. 31, 2020).
In granting summary judgment against the claim, the judge noted that, while it was “metaphysically possible . . . to have produced video games without the presence of Humvees,” they increased the game’s sense of realism (as Humvee vehicles are used by the U.S. military) and thus fulfilled a genuine purpose.
Claim 2: Infringement of the Club Crest by Not Using It
Football Manager does not use Manchester United’s club crest in the game. To do so would be likely to infringe the copyright in it.
Despite that, Manchester United is running the novel argument that the very absence of its club crest infringes its trademark protecting that crest. It alleges that Football Manager has taken active steps not to display the Manchester United crest and to replace it with a simplified red-and-white-striped logo.
At first blush this argument may seem bizarre, as most trademark infringement cases focus on “use,” rather than “non-use.” However, it becomes more credible in light of the CJEU’s 2018 decision in Case C129/17: Mitsubishi Shoji Kaisha Ltd and Mitsubishi Caterpillar Forklift Europe BV v. Duma Forklifts NV and G.S. International BVBA. In that case, the CJEU held that the act of removing Mitsubishi trademarks from Mitsubishi vehicles which were being parallel imported into the EU infringed those trademarks.
The CJEU reasoned that (1) the removal of the Mitsubishi signs and the affixing of new signs on the goods adversely affected the indication of origin, investment, and advertising functions of the mark; and (2) this deprived Mitsubishi of the benefit of the essential right to control the initial marketing in the European Economic Area of the goods bearing that mark.
It could be argued that this case is analogous: Manchester United’s “badge,” in the form of the club crest, has been removed from the depiction of the club in the game, while many other aspects of the club are retained, such as the club’s name, its red and white kit, its stadium name, and names of real team players. Manchester United argues that the removal of the club crest deprives it of the right to license that trademark to Football Manager, and of the essential right to control exploitation of its trademark in relation to video games.
There are, however, two big distinctions between this and the Mitsubishi case. Firstly, there are no actual Manchester United goods or services being used in Football Manager—only a virtual representation of the club. Secondly, the makers of Football Manager have not literally removed Manchester United’s badge from the game; they have simply not included it.
The Future of Sports Games
If Manchester United succeeds in its claim over the use of its club name, then Football Manager (and other video games) will have to either buy a license to use the names of real teams, or switch to generic names for clubs. The latter is likely to be unpalatable to Football Manager’s legions of fans. If Manchester United succeeds in its claim that not using the club crest infringes that trademark, this could force game publishers to pay for licenses of trademarks which they do not even want to use.
However, if the claims fail, the lucrative industry that has built up, under which sports clubs and tournament organizers license their IP to video games, could be dealt a heavy blow. It could also clear the way for other platforms, such as Fantasy Football games or sports betting operators, to use this IP without a license.
That said, there will always be a market for the “official” licensed game. A complete collapse of this multi-million-dollar industry is unlikely. Furthermore, the decision would only apply in the United Kingdom. Many other jurisdictions offer stronger image rights (protecting, for example, a footballer’s “likeness”), so it will still be necessary to obtain the appropriate permissions in those jurisdictions.
Of course, the eventual decision could also simply highlight that Football Manager is a unique case that turns on its facts. Here we have a game that has been around for three decades, where the practice of licensing has simply not evolved in the same way as other video games.