Written by: Nicholas Holmes

Pennsylvania State University (“Penn State”) is embroiled in a trademark infringement lawsuit with apparel retailer Vintage Brand, with Penn State alleging that Vintage Brand is using, without permission, registered trademarks of Penn State. Specifically, Penn State alleges infringement of the standard character mark “Penn State,” an image of the “Pozniak Lion,” and the Penn State crest. A comparison of Penn State apparel sold by Vintage Brand, who is does not have licensing rights, with Penn State apparel sold by merchants who do have licensing rights, is shown below:

Penn State filed suit in 2021, with both sides filing numerous motions, including summary judgment motions. Vintage Brand successful argued against summary judgment, asserting that Penn State’s trademarks should be held invalid, as they are not “source-indicators,” but rather ornamental designs. Penn State and Vintage Brand will now be set to battle it out in Pennsylvania federal court.

By way of background, trademarks are “source-identifiers,” meaning the marks identify the source of a product, and distinguish that product from products that come from a different source. For Example, Dasani® and Poland Spring® both sell bottles of water, but each mark indicates that the source of the bottles of water are different. Trademarks, when viewed in connection with products, can come in the form of product labels (think the label around a water bottle), product tags (price and brand tag on clothing, whether it be branded on the collar of a shirt or on a hanging tag), or a website display where the mark and the ability to purchase the product are positioned next to the product. There are various ways to show that a mark is used as a source indicator.

A mark cannot be a source indicator or registered as a federal trademark if it is determined to be merely ornamental, decorative, or functional.[1] The Trademark Manual of Examining Procedure states that “[s]ubject matter that is merely a decorative feature does not identify and distinguish the applicant’s goods and, thus, does not function as a trademark. A decorative feature may include words, designs, slogans, or trade dress…[t]his matter should be refused registration because it is merely ornamentation and, therefore, does not function as a trademark.[2]

Vintage Brand is relying on the above-language to assert that Penn State’s registered trademarks are ornamental and decorative designs, and thus should be held invalid as they do not function as trademarks. The USPTO frequently refuses trademark applications containing marks that look just like the image presented above as being ornamental, with the only way of overcoming the refusal is by proving the mark is famous, well-known, and distinctive (think the Adidas logo presented on the front of a t-shirt). Vintage Brand argued that since its shirts include a “Vintage Brand” hang tag and a disclaimer that the company is not affiliated with the universities and professional teams, consumers will clearly understand that Vintage Brand is the source identifier, and the Penn State design is simply an ornamental design. Penn State argued that consumers would believe the University produced or approved the product, in direct contrast to Vintage Brand’s argument.

Although the decision rendered in this case will not be binding on other courts, this lawsuit can serve as a vehicle to hopefully clarify what it means for a mark to be considered ornamental, decorative, or functional and what type of protection, if any, they should receive. This decision could also signal a change in the landscape of collegiate and professional sports merchandise licensing. Trademark law specifically states that decorative marks cannot be afforded trademark registration, however, far too often non-source identifying ornamental and decorative designs afforded the protections granted by registration, mistaking the purpose of trademark law. On the contrary, an argument can be made that if Vintage Brand prevails in this lawsuit, then the highly lucrative licensing and merchandising industry could be flipped on its head, with any apparel company or individual being able to imprint apparel with logos/slogans/designs without the owners having legal recourse.

The court will need to weigh whether federal law, which should be controlling, outweighs the public policy and need for licensing and merchandising programs. While licensing and merchandising serves a purpose, the fact that the industry is so lucrative should not cloud the court’s judgment and outweigh the federal legislation that has been enacted for the specific purpose of preventing the disagreement at issue here. Can these two theories co-exist? The collegiate and professional sports world and IP community will be keeping a close eye on this potentially industry-disrupting case.

[1] 15 U.S.C. §§ 1052(e)

[2] 15 U.S.C. §§1051, 1052, and 1127