The Cleveland Guardians roller derby team’s trademark lawsuit against the city’s Major League Baseball club ratchets up legal and public relations pressure in the fight over who owns the rights to the Guardians moniker.
Guardians Roller Derby LLC alleged in its Oct. 27 complaint that the former Cleveland Indians “lied” on a July trademark application by claiming no one else had rights to “Cleveland Guardians.”
After the MLB team inquired about the name the previous month, the roller derby team told the team it could buy the rights, but promptly rejected a lowball offer, it alleged in its complaint in an Ohio federal court.
The derby team’s lawsuit appears poised to capitalize on what some attorneys described as a mistake by the MLB team, which had raised the stakes with its July 23 announcement of a new name that would be expensive and embarrassing to abandon.
“They could have done themselves a favor by negotiating a deal and buying out the roller derby team before rolling out Tom Hanks and announcing a name,” trademark Josh Gerben of Gerben Law said, referring to the actor’s voice-over of the team’s announcement. “It was a mistake because the announcement drove the value of the trademark through the roof.”
The baseball team downplayed the allegations.
“We have been and continue to be confident in our position to become the Guardians,” a spokesman for the team said in an email. “We believe there is no conflict between the parties and their ability to operate in their respective business areas.”
Leveraging Hidden Costs
According to the derby team’s complaint, the MLB team applied for a Cleveland Guardians trademark abroad in April, a common move to avoid revealing a new brand early. Entities can apply in countries without online databases, setting a priority date in any Paris Convention country including the U.S. if the mark is used within six months.
The baseball team allegedly reached out to the roller derby team in June, more than a month before its announcement of the Guardians re-brand, according to the complaint. The derby team asked the team to make an offer, and the team offered “likely no more than fifteen minutes of annual team revenue,” according to the lawsuit.
The lawsuit estimated $290 million annual revenue for the Indians, implying an offer of about $8,300. The derby team alleged that it rejected that offer and countered, but the baseball team didn’t respond.
The lawsuit is likely a message to the baseball team that “we’re here to stay, we’re not just a mosquito you can continually swat,” intellectual property and sports attorney Edward H. Schauder of Phillips Nizer LLP said.
Schauder noted that both sides had an argument over whether there could be confusion if both teams used the name. But the bigger threat to the baseball team if the lawsuit moves forward, he said, could be discovery.
“Items found in discovery have compelled parties to settle that otherwise would not have,” Schauder said.
The lawsuit can also create bad publicity for the baseball team even before discovery. Attorneys noted that public sympathy often falls behind the little guy perceived as being bullied by bigger and richer organizations.
‘Foolish’ Not to Settle
Litigating trademark disputes can be expensive, especially for smaller entities, while awards are usually limited. But the roller derby team may not have to worry about litigation costs. Gerber and Shauder said this was a case attorneys like them would consider taking on contingency, given the potential for a settlement and publicity of the case.
That’s just another reason why attorneys said the case likely won’t see a trial or even progress particularly far. Litigation isn’t free for the MLB teams and paying the roller derby team to acquire the rights may be cheaper. Multiple attorneys, acknowledging their estimates as speculative, figured the rights could be acquired for less than the cost of a drawn-out lawsuit.
Intellectual property attorney Andrew Skale of Mintz Levin Cohn Ferris Glovsky and Popeo PC added that if the MLB team lost, the award can only grow. Even if it’s found to have infringed, the baseball team’s damages would be limited because it hasn’t profited from its new name yet. But as the 2022 baseball season progresses, that can change.
“They should make this go away,” Skale said. “They would be foolish to keep it in the system.”
A deal with the derby team could solve other problems. If the baseball team bought the rights—ideally along with the clevelandguardians.com domain the derby team owns—it would come with benefits a court win on infringement wouldn’t. The team would have the site, and could claim the derby team’s first use of Guardians as a priority date, rather than April.
Trademark attorney Carrie A. Johnson of Eastman & Smith Ltd. said the lack of confusion would be the baseball team’s strongest argument, but one she wouldn’t want to be stuck making in a case of identical marks for two sports teams and their merchandise.
“I don’t think that’s a particularly safe place to be,” Johnson said. “I wouldn’t be thrilled to be in that position.”
The case is Guardians Roller Derby v. Cleveland Guardians Baseball Co. LLC, N.D. Ohio, No. 21-2035, 10/28/21.