Penn State Case Tests Sports Merchandising’s Legal Foundation

The logic a federal judge used to deny Penn State a quick trademark win would eviscerate the foundation of the multi-billion dollar sports merchandise industry, attorneys say.

Judge Matthew W. Brann let alleged infringer Vintage Brand LLC proceed with counterclaims that Pennsylvania State University’s “ornamental” use of its logos on shirts and other merchandise fails to function as trademarks.

The opinion summarized the decades-old history of sports and collegiate trademark licensing, and suggested the modern licensing regime imposed on apparel makers may be, legally speaking, “built on sand.”

At the heart of the debate is whether designs on apparel function ...