Manchester United v. Sega & SI (Football Manager): An Exciting Techno-Legal Prospect
Background
Arguably, the greatest football club in the world, and the most successful club in England’s top flight football, Manchester United, has recently, been involved in litigation pursuant to a trademark lis with Sega and SI (Sports Interactive). Sega and SI, are the publisher and developer, respectively, of the popular video game, “Football Manager”.
Whereas other video games such as FIFA (by EA Sports) and PES (by Konami) obtain requisite licenses and authorizations to use club names, crests, strips etc., Football Manager adopts a different approach. The said game, since last 30 years, has been using all official names of football clubs sans obtaining licenses or paying any consideration to do so.[1]
Interestingly, at this juncture, after allowing such use of its marks to go on for nearly 30 years, Manchester United instituted proceedings before the High Court of England & Wales claiming infringement of its trademarks, namely the word mark MANCHESTER UNITED and the device mark comprising of the club crest, both of which are registered EU trademarks, held by the football club.
Existing Claims and Contentions
Manchester United (“Claimant”) alleged that in Football Manager, Sega and SI (“Defendants”), used the MANCHESTER UNITED word mark belonging to the Claimant without seeking consent or obtaining required licenses. Such use, as per the Claimant affects, inter alia, the origin function of the above-noted trademark because consumers of the Defendants’ game are being misled into believing that the game is originates from the Claimant or the game is licensed/endorsed by the Claimant. Further, it was also alleged that the investment and the advertisement functions of the mark were also being impaired by the Defendants’ use of the above-noted mark. Moreover, stating that a substantial chunk of the relevant public would possibly be mistaken into believing that the game enjoys a connection with the Claimant, in the course of trade, it was also alleged that such use amounts to passing off.
As regards the club crest, though it is not used by the Defendants in their game, the Claimant alleged that the Defendants’ active step of not displaying the club crest and replacing it with a simplified red and white crest, also amounted to infringement of the Claimant’s device trademark. This argument was made on the basis that such non-use of the said device mark is in a context where the real stadium name, team players etc. are being used. It was stated that a substantial section of consumers would expect to see the club crest trademark used in relation to such identifiable real world game play. In view of this, the Claimant argued that such non-use deprives the registered proprietor of its right to have the club crest licensed and used in association with such elements and thus, impeding the Claimant from exercising its right to control the exploitation of its device mark.[2]
The Defendants countered that the use of the marks was a legitimate reference to Manchester United’s team in a football context and the same had been going on since the beginning of the game without any prior objection from the Claimant. Further, it was argued that the club was trying to prevent legitimate competition in the field of video games by preventing unlicensed parties from using Manchester United’s name within such games.[3]
Claimant’s Application for Permission to Amend its Claims
Subsequently, as the dispute remained unsettled, the Claimant sought to amend its claims before the High Court. The amendment was aimed at adding a new claim regarding the Defendants’ accessorial liability for acting in common design with third parties and effecting use of signs identical to the Claimant’s trademark in downloadable files, known as “patches” for the said game. These patches, via third party websites, allow gamers to use certain graphics, which in the instant case, include the Manchester United club crest. This practice of providing patches for game, according to the Claimant, amounts to indulgence in “joint tortfeasorship” by the Defendants. In support of this assertion, the Claimant argued that this practice of patch provision had been going on for quite some time and with the knowledge, approval and encouragement of the Defendants. It was further contended that the practice benefitted the Defendants in as much as they facilitated circumvention of the need to obtain licenses for use of signs and graphics. The Claimant also argued that the game was programmed in a manner that does not prohibit or impede such circumvention. Rather, it was alleged, on the basis of screenshots taken using Wayback Machine (An Internet tool that allows users to see how a website or a webpage looked at a certain point of time in the past), that the Defendant promoted this practice to the extent of describing patch providers as digital partners.
The above was claimed to be in violation of Article 10 of the European Parliament and Council Regulation (“Regulation”). This Article prohibits a) affixation of a sign or mark to packaging, labels, tags, security or authenticity features or devices or any “other means”; and b) offering or placing on the market or stocking for those purposes or importing or exporting the other means to which the mark is affixed. The above two prohibitions come into play where, at the time of the act, there is a risk of such other means, to which the mark is affixed, being used in relation to goods and services in a manner that constitutes of infringement of rights under Article 9 of the Regulation.
Under Article 9, the registration of an EU trademark confers upon the proprietor, inter alia, the exclusive right to prevent unauthorized third parties from using a sign or a mark, identical with, or similar to, the EU trademark, in the course of trade in relation to goods or services similar or identical to the goods or services for which the EU trade mark is registered.[4]
Issues
In view of the above factual and legal matrices, the Court framed the following issues as regards applicability of Article 10 of the Regulation.
i) Was there an affixing of a sign (identical with, or similar to, the EU trade mark) to something which comes within the list of “other means” as referred to above?
ii) ii) If yes: at the time of the affixing, was there a risk that the other means could be used in relation to goods or services?
iii) iii) If yes: would such use constitute an infringement of the rights of the proprietor of the EU trade mark under Article 9 and, in particular:
a) Would such use be in relation to goods or services identical with those for which the EU trade mark is registered? ; and
b) Would such use be in the course of trade?[5]
Arguments Advanced
The Claimants argued that the club crest, being the relevant mark or sign, was being affixed to third parties’ software which was engaged in “patch provision” and such modification constituted other means, to which the mark is affixed, and hence the instant case falls within the purview of Article 10.
On the other hand, the most significant of the Defendants’ contentions in this regard, was that the act of affixation of the mark was being carried out through modification software provided by third party, and such affixation relied on downstream use (akin to ‘downloading’, ‘down streaming’, as the name suggest, occurs when data is received by a computer or network) by gamers and not by the Defendants, i.e., the use of the mark was by gamers and not by anyone else.
Analysis
This meant that the Defendants actions, sans the modification software provided by a third party, did not, directly, enable any downstream use of the Claimant’s club crest trademark. It followed that the risk of downstream use, enabled by the acts of the Defendants, did not allow users/gamers/consumers to downstream content incorporating the Claimant’s club crest trademark, and hence did not constitute risk of downstream use amounting to infringement of the Claimant’s exclusive rights.
Since the above techno-legal analysis is quite perplexing, a simplified version of the scenario is as follows.
In simple terms, in this case, the club crest could be used only when gamers acquired a modified software provided by a third party and applied it to the Defendants’ game. Therefore, the risk of affixation of the mark (club crest) emanated from gamers’ use of the modified software, and not from the Defendants’ game, Football Manager. It follows that any downstream use of the game, Football Manager, per se, does not constitute infringement of Article 9 of the Regulations.
Interpreting the applicable law in view of these factual aspects, the Court stated that for Article 10 to be satisfied, the risk must be of a downstream use which would amount to an infringement of Article 9. The risk of downstream use which does not constitute infringement under Article 9, such as that in the instant case, does not suffice the criteria of Article 10 of the Regulations.
The Court’s Ruling and Awaited Developments
For the above reasons and on a perusal of the draft pleadings of the Claimant, the Court was of the view that the permission sought by the Claimant, to make the said amendments, could not be granted. The Claimant, then sought to make some revisions to amend its claims, in furtherance of which, it was agreed between the Claimant and the Defendants that the Claimant will file a fresh application to make such amendments.
While this judgment, disallowing Manchester United to amend its claim, can be said to be an early win for SEGA and SI, the outcome of this case, as a whole, is yet to be conclusively determined. While there is an air of uncertainty about what the outcome of this case would be, it is certain that it will be interesting to observe further developments in this matter. Particularly, what intrigues this bloke (apart from the involvement of Manchester United), is how the Court would react to the argument based on infringement by way of non-use of the device mark comprising the Manchester United’s club crest. All in all, let’s hope this matter brings about some exciting developments in trademark law jurisprudence emanating from legal conflicts in the overlapping worlds of sports and video games (or ‘e-sports’).
Endnotes
[1] Peter Nunn and Stuart Lester, Brands in Sports Video Games: Why Football Manager Might Be the Exception, INTA, (October 28, 2020, < https://www.inta.org/perspectives/brands-in-sports-video-games-why-football-manager-might-be-the-exception/#:~:text=Manchester%20United%2C%20one%20of%20the,use%20of%20its%20club%20crest. >, accessed November 1, 2020)
[2] Manchester United Football Club Limited v. Sega Publishing Europe Limited & Anr. [2020] EWHC 1439 (Ch) (04 June 2020): http://www.bailii.org/ew/cases/EWHC/Ch/202ss0/1439.html
[3] Jeremy Drew and Samuel Coppard, Sega’s early win against Man Utd in Football Manager trade mark case, LawInSport, (July 16, 2020, < https://www.lawinsport.com/topics/item/sega-s-early-win-against-man-utd-in-football-manager-trade-mark-case >, accessed November 4, 2020)
[4] Art. 9 (2), European Parliament and Council Regulation 2017/1001/EU of 14 June 2017
[5] Manchester United Football Club Limited v. Sega Publishing Europe Limited & Anr. [2020] EWHC 1439 (Ch) (4 June 2020): http://www.bailii.org/ew/cases/EWHC/Ch/202ss0/1439.html, [19]
The writer can be contacted at amayxaviers@gmail.com
