Upper Deck can no longer use MLB team logos

http://www.signonsandiego.com/news/2010/mar/04/upper-deck-settles-mlb-trademark-suit/

Upper Deck settles MLB trademark suit

Company had lost licensing agreement

BY MIKE FREEMAN, UNION-TRIBUNE STAFF WRITER

Major League Baseball has settled its trademark infringement lawsuit against card maker Upper Deck, with the Carlsbad company agreeing to pay a “substantial sum or monies” for unlicensed cards it released this year.

The quick settlement of the federal lawsuit, which was brought by Major League Baseball in early February, surprised some in the trading card business. They had expected Upper Deck to push ahead with the case to get a better definition of what’s allowed for card makers that don’t have licensing agreements for team logos and uniforms.

“Maybe they got the sense that it wasn’t going to end well,” said Tracy Hackler, publisher of Dallas-based trading card magazine Beckett. “We don’t know that, but such a quick decision would seem to indicate that, at least to me.”

Upper Deck downplayed the amount it will pay MLB Properties. The company said it is “pleased with the settlement, including the amount the company paid as it related to the trading cards released in 2010,” said Jason Masherah, Upper Deck’s director of sports brands. “As a company, we are changing the direction of Upper Deck’s baseball products going forward.”

A company spokesman declined to elaborate or say whether the company would continue making baseball cards. Upper Deck put out 15 series of baseball cards last year.

Upper Deck lost its license to use team logos and uniforms on its cards in October, when MLB Properties granted an exclusive license to rival Topps.

For 20 years, the company had a nonexclusive license with MLB Properties. But like many sports organizations, baseball is trying to boost the value of its trademarks by having card makers bid for exclusive rights.

In January, Upper Deck released three baseball card series that Major League Baseball claimed infringed on its trademarks — 2009 Signature Stars, 2009 Ultimate Collection and 2010 Upper Deck Series One.

In those cards, Upper Deck removed all team trademarks from packages and card designs. But it did not airbrush out team logos on hats and uniforms from players pictured in action on the cards.

That sparked the lawsuit.

In its defense, Upper Deck claimed that in a previous case, a judge had dismissed an injunction against a card maker who had used logos, partly because it showed players in action, or work, uniforms. In addition, Upper Deck said its license with the Major League Players Association, the baseball players union, to use player images on cards could be less valuable without team logos and uniforms.

MLB Properties said some parts of the settlement were confidential, but it did reveal portions of the deal.

Upper Deck agreed to pay $2.4 million in back license fees for 2009 cards.

Besides agreeing to pay an undisclosed amount to MLB Properties for the unlicensed cards released in January, Upper Deck also agreed not to make any new sets of cards using MLB logos, uniforms or color combinations. It also must receive approval from Major League Baseball for the use of baseball jerseys, pants, jackets, caps, helmets or catchers’ equipment in future cards.

Upper Deck also agreed not to airbrush, alter or block MLB trademarks in future products.

Hackler said that provision, along with needing approval from MLB to show players in baseball gear, will severely limit the kinds of baseball cards Upper Deck can produce. To many collectors, baseball cards without team logos or uniforms are less desirable, experts say.

“Our settlement in the case against Upper Deck is a clear and decisive victory for Major League Baseball,” Ethan Orlinsky, senior vice president and general counsel for MLB Properties, said in a statement. “Upper Deck will be unable to release baseball trading cards that incorporate Major League Baseball’s intellectual property in the future.”

Matt Bourne, a spokesman for Major League Baseball, declined further comment.

Baseball cards are the biggest part of the sports card collection business, accounting for 50 percent to 60 percent of dollar and unit volume, Hackler said. But Upper Deck has card licensing deals with the NFL, the National Hockey League and college sports.