Intersport, Inc. v. National Cooegiate Athletic Association

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State: Illinois

Court: 1st District Appellate

Docket No: 1-07-0626 Rel

Case Date: 03/26/2008

Preview:THIRD DIVISION March 26, 2008

No. 1-07-0626

INTERSPORT, INC., Plaintiff-Appellee, v.

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Appeal from the Circuit Court of Cook County.

No. 06 CH 04874

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION and MARCH MADNESS ATHLETIC ASSOCIATION, L.L.C., Defendants-Appellants.

Honorable Stuart Palmer, Judge Presiding.

JUSTICE THEIS delivered the opinion of the court: Defendants, the National Collegiate Athletic Association (the NCAA) and the March Madness Athletic Association, L.L.C. (the MMAA), appeal from the order of the circuit court of Cook County entering a declaratory judgment in favor of plaintiff Intersport, Inc. Specifically, the circuit court found that Intersport's license from the MMAA to use the trademark term "March Madness" to "advertise, promote, and sell videos" of certain sports programming encompassed the right to distribute content to video-enabled wireless communications devices on demand. On appeal, defendants now contend that: (1) the circuit court erred in interpreting the term "videos" as including material transmitted to Sprint PCS cell phone customers on demand; (2) the circuit court impermissibly rewrote the language of Intersport's license agreement; and (3) the circuit court had an insufficient factual basis to enter judgment on Intersport's declaratory judgment claim. For the following reasons, we affirm the judgment of the circuit court.

1-07-0626 The record discloses that Intersport filed an amended verified complaint for declaratory relief alleging the following facts relevant to this appeal. Intersport produces sports-related programming for broadcast in a range of media, including television programming featuring college basketball coaches discussing and analyzing the NCAA men's Division I college basketball tournament (the Coaches Shows). Intersport's Coaches Shows have been broadcast on ESPN, Fox Sports Network, and elsewhere. Intersport has been using the term "March Madness" in connection with its programming since 1986. In 1989, Intersport registered the term "March Madness" as a service mark with the United States Patent and Trademark Office. The registration was for the purpose of using the term in connection with Intersport's business. However, in 1990, the Illinois High School Association (the IHSA) sought to register the mark, claiming that it had used the term "March Madness" in connection with its state high school basketball championships since the 1940s. The IHSA discovered Intersport's registration, and a dispute ensued. Ultimately, the IHSA and Intersport agreed to resolve any dispute regarding the ownership of the mark by pooling their trademark rights into a new entity, March Madness, L.L.C. This arrangement continued until 1995, when the IHSA became involved in a dispute with the NCAA over the use of the term. At that time, Intersport assigned its rights in the March Madness mark to the IHSA in exchange for, inter alia, royalties and an exclusive, perpetual license to use the mark in connection with its Coaches Shows. The license agreement specifically provided that: "SECTION 2 - LICENSE GRANT

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1-07-0626 2.1 IHSA hereby grants Intersport an exclusive, paid-up license to use

the March Madness Mark in the following manner: (a) in connection with entertainment services, namely the

presentation of athletic and entertainment personalities in a panel forum; and (B) to advertise, promote, and sell publications, videos, and

media broadcasts in connection with section 2.1(a)." The license agreement further provided that Intersport could not use the mark in any manner inconsistent with the above license grant. The agreement also provided that "[t]he term of this Agreement shall be perpetual." The parties also simultaneously entered into a perpetual marketing and representation agreement, under which Intersport agreed to "use all reasonable efforts to promote and further the licensing and use of the March Madness Marks in a manner consistent with this Agreement." The NCAA claimed that its rights in the March Madness mark began in 1982, when CBS announcer Brent Musburger described the NCAA men's Division I basketball tournament as "March Madness." Litigation between the NCAA and the Illinois State High School Association continued from 1995 until 2000, when they agreed to pool their rights in the mark and form the March Madness Athletic Association (the MMAA). The written agreement between the IHSA and the NCAA forming the MMAA specifically provided that the IHSA thereby assigned the Intersport license agreement, exactly as written, to the MMAA. In March 2006, Intersport entered into an agreement with Sprint, under which Intersport would provide Sprint with a variety of original programming to be disseminated to Sprint

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1-07-0626 customers via Sprint's mobile wireless media network. Intersport would also provide edited segments of its Coaches Show programming for dissemination over Sprint's mobile wireless media network. The day after Intersport and Sprint announced their agreement, the NCAA sent Intersport and Sprint a letter asserting that if Intersport were to provide the Coaches Shows to Sprint for distribution to mobile communications subscribers, Intersport will have violated the license agreement. The NCAA also took the position that the term "media broadcast" as used in the license agreement should be interpreted in accordance with the definition of "broadcast" in the Federal Communications Act (47 U.S.C.

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