From Milan to Miami: an Inter-national trademark battle

Major League Soccer (MLS) has announced that its men’s professional “soccer” league will be suspended until 10 May due to the Covid-19 pandemic and is "extremely unlikely" to resume play on that date. While there is no action on the field, the MLS continues to be embroiled in an off-pitch game against Football Club Internazionale Milano (Inter Milan) of Italy’s Serie A – a trademark battle.

Trademark rights in the USA

On 5 September 2018, the MLS announced that its new Floridian franchise (whose president is former football icon and global superstar, David Beckham) would be officially named “Club Internacional de Fùtbol Miami”, or “Inter Miami CF” for short.

In a franchise system like the one operated by the MLS, clubs pay an entry ticket to be part of the competition. It is the league itself which owns the trademarks covering the clubs’ names. Trademark applications for the Miami-based franchise were thus filed by the MLS before the United States patent and trademark office (USPTO). The related applications sought to designate various products (primarily miscellaneous merchandise, such as mouse pads, posters, calendars, and toy figurines) and services (entertainment services, including soccer exhibitions performed live in a stadium and transmitted through other media).

A trademark registration is a national or regional monopoly on a sign, granted by a trademark office, to designate specific goods or services listed in the trademark application. It generally confers the right to prevent the use, by any third-party, of the registered sign to designate identical or similar products.

While the trademark application “Club Internacional de Fùtbol Miami MMXX” is still under consideration in the USA, the USPTO has rejected the other applications on the signs “Inter Miami”, “Miami Inter”, “FC Miami Inter” and “Inter Miami CF”. It has notably considered that the word “inter” was merely descriptive of the MLS and of its goods and services and would be a term generally used to describe soccer clubs or teams comprised of international players or involved in international competitions.

Under trademark law, “descriptiveness” of a sign means that such sign would serve, in normal usage from the point of view of the public, to designate the goods or service in respect of which registration is sought. Descriptive signs cannot be the subject of a trademark monopoly, as everyone should be permitted to use that sign to describe the products or services at stake. For example, the sign “apple” could be registered as a trademark to designate “computers” or “software”, but generally not to designate “apples” or “fruits”.

Therefore, while the MLS has not been granted any trademark registration on the short-form “Inter Miami”, this does not prevent the MLS from using this name in the course of its business. The only consequence is that it will not be able to prevent any third party (at least on the basis of trademark law) from using such signs to sell similar goods or services in the USA.

The threat from Inter Milan: a game changer?

It appears that the decisions of the USPTO were also influenced by the existence of an earlier US trademark application on the sign “inter”, filed on 18 March 2014 by Inter Milan and ultimately “published” (in effect, conditionally accepted) by the USPTO on 25 September 2018 to designate various products (including cell phone covers, dog collars, bed sheets, scarves and soccer balls) and entertainment services (such as organising and staging professional soccer games and exhibitions).

If officially registered, this trademark would entitle Inter Milan to start litigation to prevent any third party from using the sign “inter” to sell identical products and services in the USA. Inter Milan could also seek to prevent any third party from registering or using a sign similar to “inter” (such as Inter Miami) to promote similar goods or services, if there is a likelihood of confusion in the consumers’ mind. “Likelihood of confusion” is a legal concept which relies on the assumption that consumers, facing similar signs used to promote similar goods or services, may reasonably believe that such products or services have the same origin or are supplied by associated entities.

This is exactly what Inter Milan has been threatening to do. It has sent the MLS a cease and desist letter to demand (i) the withdrawal of the MLS pending applications including the term “inter”; and (ii) the change of the name of the new Miami-based franchise to prevent any risk of confusion between the two football clubs.

The USPTO’s decision to date: only one part of the story

The MLS’ response has been to try to prevent the pending registration of Inter Milan’s “inter” trademark in the USA by filing an opposition to such registration.

This opposition is based on two grounds: (i) the “inter” sign would be descriptive for the goods and services designated; and (ii) the use of this sign by Inter Milan for the goods and services identified in the application would be likely to cause confusion to the public (with consequent injury to the MLS), since other soccer teams or associations also use the sign “inter” (in particular, the Chicago Inter Soccer Club, Inter Atlanta FC, and the United Soccer League).

On 3 January 2020, the USPTO ruled that the MLS’ “likelihood of confusion” argument was inadmissible. Indeed, the MLS did not rely on its proper prior rights (it does not have any), but on alleged rights of third parties (namely the other football clubs and associations). The MLS did not prove that it had any legitimate interest in doing so, which is a fundamental requirement in any opposition procedure.

However, the USPTO’s decision does not conclude the opposition procedure and does not mean that the MLS will not eventually succeed, in particular because the “descriptiveness” limb of its argument remains in play (and was retained against the MLS itself). The MLS also had the opportunity to substantiate its “likelihood of confusion” claim again. Unsurprisingly, Inter Milan maintained that such argument should be inadmissible. The USPTO will decide (again) on this very specific point in the coming weeks. However, we expect that its full decision will not be delivered before 2021.

Inter Miami vs. Inter Milan: a battle in its infancy

The stakes of the game being played before the USPTO are high: the right for Inter Milan to receive trademark registration in the USA for the sign “inter” could have significant commercial implications. However, the decision will not order the MLS to change Inter Miami’s name, as the USPTO does not have the power to do this.

In the scenario where the “inter” sign is registered for Inter Milan, while possibly deprived of the trademark on “Inter Miami”, the MLS franchise could still operate under that name and sell merchandise branded as “Inter Miami”, in the absence of further actions from Inter Milan. However, the registration could signal kick-off of a rousing battle. The Italian club may want to start separate infringement proceedings to prevent Inter Miami (and possibly other teams which names include the word “inter”) from using its short name. In this eventuality, Inter Milan would have to address some additional legal issues: Is the “inter” trademark effectively used in the USA? Is this trademark really infringed by the use of the franchise name “Inter Miami”? Not to mention that the validity of the “inter” trademark itself could also be called into question during this separate action.

Inter Milan may also be willing to open new fronts of litigation (for example, in Europe) or to raise alternative grounds (such as passing-off), to intensify the pressure. Or the Italian club could choose another route entirely and try to settle the case, and make Inter Miami its second privileged partner in the MLS, alongside DC United. There is precedent for this in the MLS, as its Real Salt Lake franchise has an official partnership with Spanish club Real Madrid.

Amidst all of these options and scenarios, one thing is clear: if this Inter Milan – Inter Miami clash were a football game, the pending US procedure is just the warm-up.