Naked Licensing ‘N The ‘Hood
By: JOHN C. PICKERILL
September 2007
Kirby Puckett grew up playing baseball on the inner city streets of Chicago, dreaming of becoming the next great professional baseball player. Unfortunately, baseball is all but lost in today’s big cities, including a specifically sharp decline in participation among African Americans. Very few major league ball players of any racial background originate from inner cities these days, and current stars like Barry Bonds and Gary Sheffield bemoan the fact that the sport is almost dead in African American communities.
Major League Baseball (MLB) is currently initiating programs and building facilities in inner city areas like Compton, California, in hopes of countering this trend. However, MLB’s latest attempt to reach this community have been met with controversy. Anti-gang activists are now protesting MLB and inner city retailers for the sale of officially-licensed MLB® hats which feature gang colors and symbols.
MLB has responded to the criticism by back-pedaling and playing dumb, but I’d be shocked if this was a mere oversight. MLB is one of the biggest, most aggressive and most sophisticated trademark licensing heavyweights in the world. It is difficult to believe this well-oiled machine simply forgot to do its homework before licensing the New York Yankees’ logo to be used in connection with gang symbols.
The very nature of trademark law and trademark licensing casts significant doubt on MLB’s claims of innocence. Trademark law focuses on the consumer, with the goal of preventing consumer confusion as to the source and quality of products sold under a particular brand. The public must be able to rely on trademarks as an indicator of consistent product quality – good or bad. For example, a consumer who enjoyed a BIG MAC® sandwich last week should be confident that the BIG MAC® sandwich he purchases today will be a similarly stacked monstrosity. Conversely, a consumer who did not enjoy what the BIG MAC® brand sandwich had to offer will probably decide not to buy a BIG MAC® sandwich in the future. Other restaurants can’t sell chicken sandwiches, braunschweiger sandwiches, or even a different hamburger sandwich under the trademark BIG MAC® because it would inhibit a consumer’s ability to link quality with a mark. For good or bad, consumers must be able to rely on the BIG MAC® trademark as an indication that the corresponding sandwich will always consist of two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
Likewise, trademark licensing law requires the licensor to protect consumers from marketplace confusion. Licensors, like MLB, must exercise actual “control” over the use of its licensed marks to ensure consumers will experience a consistent level of quality for products offered under those marks. Licensees, like the maker of baseball hats, generally must submit products and marketing materials utilizing the marks to the licensor, in this case MLB, for approval. Under such a licensing arrangement, the licensor not only has the power, but also the duty, to prohibit the sale of any item that would affect consumer expectations. If the licensor does not exercise such control over the licensee’s use of the mark, this licensing without control (or “naked” licensing) can lead to the licensor losing its own rights in the mark.
The New York Yankees® mark is one of MLB’s most prized properties. It is hard to believe MLB neglected to ask a hat-maker why it was adding a crown to the Yankees’ logo or placing it against a background of gang colors before approving the products. Such a lapse in control would jeopardize the value and ownership of this mark – an outcome the entire MLB licensing establishment is designed to prevent. MLB simply would not allow a licensee to combine its marks with gang symbols without carefully weighing the options and determining that a gang affiliation might help open up an untapped market.
Instead of feigning innocence, MLB might want to consider embracing such an urban strategy. The National Basketball Association unabashedly targets the inner city and aligns itself with the culture of the streets. Should MLB be ashamed and apologetic for seeking its own foothold in this marketplace? Will it lose its core audience if it tries to become all things to all people? I’m guessing these are the very questions MLB is struggling to answer in addressing its lack of popularity among inner city youth. However, at this point, it is unrealistic for MLB to deny it has purposely targeted this audience with gang-related merchandise.
Regardless of MLB’s current intent or future marketing strategy, the true losers in this licensing scheme are the gangs themselves – at least from a pure trademark standpoint. The Bloods, Crips, and Latin Kings have clearly developed valuable rights in their proprietary symbols – rights with enough commercial value to catch the eye of MLB. (Remember, trademark law does not weigh in on quality – it merely tries to assure consistency.) Unless these gangs are receiving royalties from the sale of these gang-related items, MLB may soon have problems that run much deeper than its current public relations issue. Of course, I must regretfully decline to handle such a dispute at the present time, but I’m sure I could find a solid referral if any of the gangs are interested in representation.