KU licensing dollars
Kansas University and Kansas Athletics split royalties earned from trademark licensed goods each year, usually collecting 10 percent of the wholesale price. Royalties earned in the past five fiscal years:
• 2008: $2.2 million
• 2009: $1.8 million
• 2010: $1.9 million
• 2011: $2.1 million
• 2012: $2.3 million
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It’s not every month that a cease-and-desist letter lands Kansas University in national headlines.
But that’s about how often, on average, one of those letters lands in the mailbox of someone accused of violating KU’s trademarks.
Every day, Kansas Athletics, along with national groups it enlists to help, works to keep people from profiting from the use of KU’s trademarks: “KU,” “Jayhawk,” “Rock Chalk” and more. From T-shirts to bracelets to beanbag games, unlicensed products that use those words threaten KU’s ability to continue to claim those words or phrases as its own — and to take in around $2 million in revenue each year from the sales of products it has licensed to include them.
A cease-and-desist letter from KU attracted a good deal of attention last week from area and national media outlets. Perhaps not coincidentally, it concerned a group that operates a Twitter account that shares photos of women’s chests adorned with KU-themed clothing, which KU asked to stop selling merchandise with “KU” on it.
But that’s one of about a dozen such letters Kansas Athletics has sent out over the past year, estimates Paul Vander Tuig, KU’s trademark licensing director. And that’s just a portion of the instances of potential trademark infringement he comes across.
“It can vary from a cease-and-desist letter to me picking up the phone to say, ‘Hey, did you know we own that?’ ” Vander Tuig said.
Always on watch
Vander Tuig has handled trademark protection and licensing matters for KU since 1993. He and his responsibilities shifted to the athletics department in 2006.
He works to make sure KU’s trademarks aren’t being used without authorization, and he says it’s a never-ending task.
He relies on a number of different sources who spot potential trademark violations. They include him and other Athletics workers; the Collegiate Licensing Company, which works with KU and about 200 other clients to assist with trademarks and licensing; or an affiliated group that represents universities and professional sports teams; or, sometimes, even alumni or fans who spot something suspicious.
“We’ve got a lot of eyes out there,” Vander Tuig said.
One other pending trademark case for KU, Vander Tuig said, involves a company that sells beanbag-toss games — the kind that dot the streets near Memorial Stadium on KU football game days — alleged to be decorated with artwork that uses trademarks from KU and other schools without authorization. Another recent case involved a group that allegedly sold T-shirts during the NCAA Men’s Basketball Tournament that included the name of KU’s Ben McLemore, which would violate NCAA rules as well as KU’s trademarks.
Trademark-infringing items can show up in the form of hand-made goods on websites like eBay or Etsy, or they can be sold by larger outfits that sell counterfeit goods bearing logos of pro sports teams as well as colleges.
“Sometimes it’s ignorance,” Vander Tuig said. “And sometimes it’s not ignorance at all.”
Cease and desist
This is how it is for major universities around the country, said Jim Aronowitz, associate general counsel for the Collegiate Licensing Company. CLC assists KU and other universities, as well as athletic conferences and football bowl games, in protecting their trademarks.
“It keeps us quite busy,” Aronowitz said.
That job has only gotten tougher as the Internet has made it easier for people to sell unauthorized goods.
The cease-and-desist letter is the company’s most frequent tool, Aronowitz said, and that’s generally enough to resolve the problem.
Sometimes, though, it’s not. KU and Kansas Athletics sued downtown Lawrence retailer Joe-College.com for alleged trademark infringement, winning a judgment in 2008 before reaching a settlement after the store closed. In 2010, KU filed a motion to support the University of Alabama in another trademark case in a federal appeals court.
Protect it or lose it
Aronowitz, as well as Kansas Athletics officials, says there’s one big reason the constant trademark vigilance is necessary: If KU, or any trademark holder, doesn’t protect those trademarks, they might fade away.
Indeed, that can happen. It’s a phenomenon called “genericide,” says Andrew Torrance, a KU professor of law who studies intellectual property.
It’s up to trademark holders to make sure their marks aren’t used improperly, Torrance said. If someone uses your trademark without your permission, it’s up to you to put a stop to it. And if you go too long without doing so — especially if there’s a reasonable chance you know it’s going on — there’s no going back.
And if too many people use that trademark, it can lose all the protection it ever had. That’s why “escalator,” once a trademarked brand name, is now considered generic.
“Essentially, you lose your trademark because too many people use it,” Torrance said.
And KU has a powerful incentive to keep that from happening to its trademarks: millions of dollars in royalties from sales of licensed KU merchandise.
KU generally receives 10 percent of the wholesale price of licensed goods sold, which amounts to perhaps 5 percent of the retail cost.
KU’s licensing royalties have risen each of the last three years, hitting $2.3 million for the 2012 fiscal year. The university and the athletics department split that money evenly, after licensing costs are taken out. Those funds go mostly toward athlete scholarships on the athletics side, and on the university side they're split among the KU Memorial Unions, the KU Bookstore at the KU Medical Center and scholarships.
“It’s a lucrative monopoly for KU to protect,” Torrance said.
The meaning of ‘Jayhawk’
So if KU guards vigilantly against trademark infringement, then why is it that when you look at a Lawrence phone book, you can find a list of some 30 or so businesses starting with the word “Jayhawk,” a KU trademark?
There is a Jayhawk bookstore, a dental clinic, a taxi service and more.
Well, many of them may have been in business before the mid-1980s, when KU and other universities first began licensing merchandise and protecting trademarks more seriously.
“In our case, it really has just made sense to, in effect, grandfather those things in,” Vander Tuig said.
Plus, Torrance says, the word “Jayhawk” may be in more of a gray area when trademarks are concerned than, say, “KU.” Its roots are in the term “Jayhawker,” used before the Civil War when KU didn’t yet exist. So one could make a legal case that the word “Jayhawk” in his business name is referring not to KU but to anti-slavery fighters.
That business owner’s case would be hurt, though, if he used a crimson-and-blue Jayhawk logo for his business. And any business that starts up now with “Jayhawk” in its name is likely to get a closer look from KU.
Kansas Athletics and CLC officials say their trademark enforcement protects KU’s brand, saves its fans from inferior products and ensures that proceeds from KU goods go to help the university.
But, when KU’s enforcement efforts start to spill into the news, leaders may have something else to keep in mind: the impression that makes in its fans’ eyes.
“It’s difficult to strike exactly the right balance between protecting your monopoly and alienating your fans and supporters,” Torrance said.