from the Bet Jamaica website
Every March, true basketball fans across America are struck with a fever that is known as "March Madness." Few of the fans who fall victim to this illness and few of the pundits who blithely throw this catch phrase around, however, realize that the words "March Madness" and the Internet domain name "marchmadness.com" are protected property. According to a recent federal district court decision, however, this trademark and domain name are the exclusive property of the March Madness Athletic Association, L.L.C. ("MMAA"). March Madness Athletic Assn., LLC v. Netfire, Inc., 162 F.Supp.2d 560 (N.D. Tex. 2003) ("the federal district court action").
MMAA is a holding company that was formed in 2000 by the National Collegiate Basketball Association ("NCAA") and the Illinois High School Association ("IHSA") in order to pool all of their respective trademark rights in "March Madness" and thereby facilitate licensing those rights in exchange for royalties from licensees. In return for pooling their respective trademark rights, the NCAA and IHSA each received an exclusive, perpetual license from MMAA to use the term "March Madness" to refer to and market their respective annual March basketball tournaments.
MMAA's trademark rights to "March Madness" was contested in the federal district court action by the defendants, Sports Marketing International, Inc. ("SMI") and Netfire, Inc. ("Netfire"), who contended that "March Madness" is a generic term and that their acquisition and use of www.marchmadness.com was lawful. SMI and Netfire developed a website that used the NCAA basketball tournament to attract visitors to the site and thereby generate advertising revenue.
MMAA claimed that it was entitled to relief against the defendants for cybersquatting, false representations, trademark infringement, and unfair competition under the Lanham Act and state law. The Lanham Act is a federal statutory scheme that provides specific remedies for trademark and copyright infringement. 15 U.S.C. § 1114-1117. If left unchecked, such infringement and resulting customer confusion would allow the infringing business to compete unfairly in the marketplace.
In reaching its decision, the federal district court made extensive factual and legal findings that could almost serve as a textbook for understanding the concept of trademark infringement. The court found that "March Madness" is a descriptive mark that has acquired secondary meaning and therefore is protectable as a trademark. It noted that the term is not inherently necessary to describe basketball tournaments in March, citing the National Invitational Tournament as an example of another tournament that occurs almost simultaneously with the NCAA Tournament and does not need to utilize the term "March Madness" to describe and market its tournament.
The court observed that expert witness and lay witness testimony on behalf of MMAA demonstrated that the primary significance of "March Madness" to members of the public over the age of 18 who are likely to visit a sports website is that the term is a trade name relating to basketball. The court concluded from this evidence that "March Madness" has acquired secondary meaning in the marketplace.
The court also found that there was a strong likelihood of confusion between the protected trademark "March Madness" and the defendants' website, marchmadness.com. March Madness and marchmadness.com sought business from the same consumers, i.e., fans of the NCAA basketball tournament. The court noted that there was abundant evidence of confusion among potential advertisers regarding the true affiliation of MMAA to the NCAA tournament versus the defendants'. There was in fact no affiliation between the defendants and the NCAA tournament.
The defendants argued that "March Madness" had become generic, because several organizations other than the NCAA used the term. The court found that there were few instances of such use and that this contention was accordingly unpersuasive.
The defendants also argued that the MMAA (and its predecessors in interest, the NCAA and IHSA) should be equitably barred from claiming ownership of this mark, because it had been in use since the late 1930's, in the case of the IHSA, and since 1982, in the case of the NCAA (when it was "coined" by the broadcaster Brent Musberger), and yet neither the NCAA nor the IHSA had sought to register the mark with the Patent and Trademark Office or actively policed its use until the 1990's, when IHSA entered into negotiations with another entity that had registered the mark. The court noted, though, that both the NCAA and IHSA had separately sent cease and desist letters to SMI in 1996 and found that these letters showed diligence in policing the mark by MMAA's predecessors in interest and also served as notice to the defendants of the NCAA's and IHSA's objections to SMI's use of the mark in a domain name.
Although the federal district court went to great lengths to expound upon the factual and legal bases for holding that "March Madness" is owned exclusively by MMAA, it found that MMAA had failed to prove any monetary damages. Accordingly, the only remedies awarded to MMAA were its court costs (not its legal fees), an injunction permanently preventing the defendants from the commercial use of the term March Madness, and the transfer of the certificate of the domain name marchmadness.com to MMAA.
Considering the significant legal fees that were likely spent on this protracted dispute, one might conclude that MMAA was "mad" to have filed this lawsuit in the first place! In reality, though, MMAA's expensive pursuit of legal remedies without a realistic hope of a monetary damages award is a true measure of the business value inherent in protecting its exclusive legal interests in "March Madness." Basketball fans should beware; March Madness is valuable property!