Judicial Ruling In Socios Delivers Lessons For Sports Marketing Companies

• Published date: 21 June 2023
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Trademark, Advertising, Marketing & Branding, Sport
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Mr Neil Popovi&#263

On March 27, 2023, Judge Susan Illston granted a preliminary injunction limiting use of the mark 'Socios.com' in a trademark dispute between two sports marketing companies.¹ Although the court vacated the preliminary injunction a month later when the parties settled, the initial decision provides important lessons for sports marketing companies.

Background

The case concerned the marks 'SocioMX' (the senior mark) and 'Socios.com' (the junior mark) used by two sports marketing companies providing 'fan engagement' services for U.S. fans of professional soccer. Since 2014, plaintiff Sports Marketing Monterrey Group LLC provided a fan loyalty program that connects Hispanic soccer fans in the U.S. with professional teams in Mexico. Plaintiff owns two U.S. trademarks, 'SOCIOMX' and 'SOCIO MX,' and displays both marks online, in advertisements, and on merchandise. Before COVID-19, plaintiff generated most of its revenue through sponsorship agreements and by selling tickets to games it organized. By 2022, plaintiff hosted over thirty soccer games with professional teams from Mexico, the U.S., and Italy, reaching approximately 500,000 fans. Following the pandemic, SocioMX focused on social media advertising and creating graphics for its sponsorship partners to display in their own ads. Plaintiff's national brand partners pay SocioMX for the right to use the SocioMX mark in connection with their products or services. In 2021, plaintiff relaunched its 'VIP Package,' where fans receive exclusive rewards like ticket presales, chances to meet players, access to private trainings, and autographed jerseys for an annual fee. To date, SocioMX has sold more than 7,000 VIP packages.

Defendant Socios Services U.S. Inc. launched Socios.com in Europe during 2018, offering a digital app that enables professional sports teams to participate in a unique reward system where fans receive voting rights in club management. Defendant's app provides such 'VIP experiences' using digital assets ('Fan Tokens') that can be purchased or obtained through participating in in-app polls, voting, and games. To date, U.S. consumers have purchased over two million Fan Tokens. In 2021, Italian soccer team Inter Milan announced Socios.com as its new Jersey Partner for the 2021-2022 season, and the Union of European Football Associations (UEFA) then announced its partnership with Socios.com through the 2021-2024 cycle of the UEFA Champions League and Super Cup. Socios.com's U.S. partnerships include...