Last updated 9 August 2016

Intellectual property is generally concerned with creating rights over things such as literature, music, ideas, art and images. Unlike rights over other property, such as cars or houses, intellectual property is a little more complex because the thing for which a right is given is intangible. One of the main areas of intellectual property is copyright which is regulated by the Copyright Act 1968 (Cth).

Once a broadcaster (e.g. a TV station) obtains the right to broadcast a sporting event, the exclusive right to record the broadcast (on video, audio cassette or as a digital file on the internet), sell the record, transmit the signal interstate or internationally, or to re-broadcast generally lies with the broadcaster, who in effect buys that right from the organisation which owns or runs the event (see Copyright and Moral Rights chapter).

Trademarks are another form of intellectual property governed by the Trade Marks Act 1995 (Cth). A trademark is generally a letter, word, name, signature or other form of sign that is used to distinguish goods or services. The use of trademarks by sponsors is increasingly important in all levels of sport. Before a company can use a trademark or declare it to be intellectual property capable of attracting rights, it must be registered as a trademark pursuant to the legislation mentioned above. Such a trademark should not mislead or deceive people as to which product it refers to, and the trademark should not be used where it gives the wrong impression that a sportsperson or sporting organisation endorses the product associated with the trademark. This means that before trademarks can be used, trademark owners must engage in contractual sponsorship relations with sportspeople or sporting organisations. The use of selective endorsement (where well-known sportspeople endorse a particular product) can be a powerful commercial tool for prudent sportspeople and organisations.

Finally, it should be mentioned that athletes do not have intellectual property in their own images. However, a broadcaster or company can be stopped from publishing an image that gives the wrong impression that the athlete is connected in some way to a certain product or endorses that product. This is potentially actionable under the civil wrong of ‘passing off’, or via consumer protection statutes for ‘misleading or deceptive conduct’ (see Consumers and Contracts chapter).

Athletes, contracts and restraint of trade

A contract is a binding agreement between two or more parties. In most cases, a binding contract need not be in writing, nor must it contain formal terms. Provided the parties have agreed then there will be a legally binding contract. That contract then determines the legal relationship between the parties. For this reason, athletes can contract with sporting organisations with respect to the terms of their playing conditions. This means that they can agree to:

  • not play for any other team (particularly after announcing a retirement)
  • not discuss playing terms with any other team during the life of a contract
  • most importantly, abide by any rules that require them to be suspended (or disqualified permanently) from playing as a result of any infringement of those rules.

Courts will, however, declare a clause restraining a person’s trade to be invalid because of public policy grounds. To not be invalid, the restraint must be reasonable both to the interests of the parties involved (e.g. a club and a player) and to the public.

Unreasonable or invalid clauses include:

  • stating that a player will never play for any other team
  • establishing provisions for suspensions or disqualifications that are not directed at maintaining the rules but at removing the player
  • preventing players from permanently supporting or endorsing the product of a sponsor’s rival
  • preventing players from using rival products.

There are further restrictions on anti-competitive behaviour in pt IV of the Competition and Consumer Act 2010 (Cth), however these do not apply to employment contracts.