The NCAA and the Leaking Dike

The Southeast Texas Legal Journal reports that a corporation set up by Johnny Manziel, the Texas A&M quarterback and 2012 Heisman Trophy winner, has filed suit against an individual infringing upon his trademark:

Texas A&M University football star and Heisman Trophy winner Johnny Manziel has filed a lawsuit claiming an individual is infringing on his trademark “Johnny Football”nickname in order to sell shirts.

During the 2012 college football season, Manziel licensed the mark “Johnny Football.” In November 2012, he discovered that the defendant was using his trademark to sell shirts which stated “Keep Calm and Johnny Football.”

The defendant is accused of trademark infringement under the Lanham Act, Texas unfair competition, including right of publicity, palming off and misappropriation.

JMAN2 Enterprises is asking the court for injunctive relief and an award of damages for the unlawful sale of goods, exemplary damages, attorney’s fees, interest, and court costs.

The lawsuit has invited speculation as to whether there is a NCAA "loophole." As one observer writes:

[T]he NCAA recently notified Texas A&M that, "a student-athlete can keep financial earnings as a result of a legal action."

You see the loophole you can drive a Rolls-Royce through yet?

Manziel can't directly profit off the sale of licensed products featuring his likeness, but he can pocket any proceeds that arise from a trademark lawsuit. Which is basically the same thing.

Raising this interesting question, what's to keep a bunch of Texas A&M boosters from intentionally infringing on Manziel's trademark, being sued for doing so, and then settling out of court for hundreds of thousands of dollars in legal payments to Manziel?

Nothing.

In other words, isn't this ruling a license for boosters to legally pay Manziel to play college football?

Yep.

Several years ago I explained that there may be a perfectly legal and appropriate way to allow NCAA athletes capitalize on their intellectual property under the Bayh-Dole Act.

If there is anyone who should be empathetic with the quandary of student athletes it should be university faculty. For many years university faculty expressed concerns that their research with commercial value was simply being given away due to their status as university researchers. The issue became a matter of national importance as Congress became concerned about technology transfer and the incentive structure in the modern university, no longer considered an ivory tower but an engine of U.S. economic growth. In 1980 Congress passed a law that allowed universities to hold the intellectual property rights to inventions by their faculty and to set up profit-sharing schemes with their faculty.

Here at CU, income resulting from patents derived from research performed on campus is shared between the inventor and the campus, with 25 percent going to the researcher personally and 75 percent to the university (with one third of that devoted directly to the researcher`s work). Not every faculty member files patents and fewer still see any financial gain, but the rewards can be significant. One research group`s patents at Columbia University resulted in $790 million in revenue.

When Bob Williams, VP of communications for the NCAA, was recent asked by ESPN if college athletes should receive a cut in the sales of jerseys bearing their name he responded, "I think you have to remember whose jersey it really is. The school name, the colors, that`s really the school`s and the institution`s property. It`s hard to say that the student-athlete 'owns` that jersey or it`s his jersey. But that intellectual property is owned by the institution." This is exactly the sort of convoluted argument that led faculty to demand a share in the profits that resulted from their unique contributions to a university.

The NCAA is facing a growing number of leaks in the dike that it has build to contain the "student-athlete."  I would guess that it will soon run out of fingers.