What is the dispute between Manchester City and Superdry?

As you may have seen in the news, Superdry has brought a trade mark infringement and passing off claim against Manchester City. Superdry claims that the use of ‘Super “Dry”‘ on Manchester City’s training shirts could damage the reputation of the Superdry brand and create a misrepresentation that the training kits are in some way related to Superdry.

Manchester City has used ‘Super “Dry”‘ on their logo as part of their sponsorship deal with Asahi to promote Asahi’s alcohol-free range.

Superdry has sought an injunction to prevent the further use of ‘Super “Dry”‘ on the training kits in addition to financial damages. Superdry has even sought the option for the destruction of the goods bearing the alleged infringement.

Superdry and Asahi have had a long-standing battle over the use of Superdry and Super “Dry”. When Cult Clothing (the initial Superdry company) sought to file a trade mark for Superdry in 2004, this was opposed by Asahi.

Asahi was unsuccessful in their opposition as their trade marks did not protect clothing and they couldn’t evidence a sufficient risk of confusion.

Why is the claim not against Asahi?

Whilst the trade mark is owned by Asahi, Manchester City were using this on their training kits as part of their sponsorship agreement with Asahi.

These training kits were advertised and sold by Manchester City, meaning that they were using a similar if not identical trade mark for identical goods to the Superdry trade mark in the course of trade. This, according to Superdry, amounts to an infringement of the Trade Marks Act 1994.

Superdry has also brought a claim of passing off. They claim that their Superdry brand has a significant reputation in the UK and allege that Manchester City’s use of ‘Super “Dry”‘ creates a misrepresentation that the kits are created by, or are related to, Superdry.

They also claim that this misrepresentation is likely to cause damage to Superdry’s goodwill, especially if the kits are shown to be of poor quality.

What has Manchester City had to do?

To mitigate any infringement, Manchester City has removed ‘Super “Dry”‘ from their training kits. This will reduce any potential damages or account of profits which they may be ordered to pay.

There were also considerations as to whether they would need to rebrand their Asahi Super Dry Tunnel Club, however this was not included in the claim. This is because Asahi’s trade marks do protect the use of Super “Dry” related to services for providing food and drink as well as bar and restaurant services, whilst Superdry’s does not.

The steps taken by Manchester City have resulted in unanticipated costs and logistical issues the club. These costs are in addition to any damages which may be awarded against them at trial, plus Superdry’s legal costs, if Superdry’s claim is successful.

How can you protect yourself in this situation?

Being the front of shirt sponsor on a professional football shirt is gold dust for brands.

Such a placement will draw many eyes to their business and give them an edge in their market. It may also draw out potential infringement claims due to the exposure of a brand to a new audience.

Sponsor trade marks are often only registered for goods and services which relate directly to their business operations, not for the use on clothing (which is obviously problematic for a kit sponsor)!

We would encourage you to proactively vet potential sponsors, both for their reputation and potential risks associated with using their brand. Even more so when a brand will be used in a key area such as front of shirt, or even stadium naming rights.

Searches of intellectual property registers can show whether there are any prior rights holders that may object to your use of the brand in the relevant context, such as on clothing.

In any event, all agreements you enter which will require you to use another party’s branding should include a third-party intellectual property indemnity clause. These clauses permit you, where an infringement claim is brought against you on account of your use of your sponsor’s branding, to claim any losses or damages back from your sponsor.

Whilst this doesn’t remove the headache and press from the claim, it will reduce your financial burden.

Sponsorship agreements: How we can support you

We would always anticipate that you will have carried out your own diligence ahead of entering into a sponsorship agreement, or any agreement where you will be using someone else’s intellectual property.

However, if using a trade mark is part of the agreement, it can be beneficial to apply additional diligence. We can conduct searches to confirm what the sponsor’s trade marks are registered for, and whether there are any existing trade marks which could cause issues for your intended use.

Should any issues be raised, we can assist in the preparation of the sponsorship agreement, ensuring that appropriate indemnities are provided to you. Should any claim arise, we can also assist you with managing the claim and calling on the indemnity from your sponsor. Find out more about our Intellectual Property, Trade Marks & Design team here.

Explore more updates for football clubs in the pre-season edition of Beyond the Game, here.