The U.S. Soccer Foundation, a charitable organization, is taking the U.S. Soccer Federation to court over a battle to keep its name and logos after a sudden dispute between the two intertwined parties. 

By Michael McCann
December 10, 2018

Which sports organization do you think of when you read the words “U.S. Soccer Foundation?”

This question is central to a new lawsuit brought by the U.S. Soccer Federation Foundation (“Foundation”) against the U.S. Soccer Federation (“USSF”). As first reported by SI.com, the Foundation filed its complaint last Thursday in the U.S. District Court for the District of Columbia. The Foundation seeks, among other things, declarations that its use of “U.S. Soccer Foundation” and related logos does not constitute infringement and that the Foundation’s trademark rights are superior to those of the USSF. U.S. District Judge Timothy Kelly, who has received attention for presiding over Jim Acosta’s White House press credential litigation (CNN v. Trump), will preside over Foundation v. USSF.

Although the Foundation and the USSF have extremely similar names and although both are 501(c)3 not-for-profits focused on soccer, they are unique entities with very different functions. The Foundation is focused on expanding the sport of soccer in the United States, with a “special emphasis” on promoting the welfare of children in underserved communities. To that end, the Foundation offers after-school soccer opportunities and secures access to safe play areas. It also distributes free soccer equipment to underprivileged children. The Foundation was formed in 1991 and officialy made active in 1994 through $50 million of the profits from the U.S.-hosted World Cup that year “to serve as the major charitable organization of soccer in the U.S.” Since that time, it has awarded more than $100 million in grants to non-profits and distributed over one million items of soccer equipment.

In sharp contrast, the USSF is the official governing body of soccer in the United States. This governance function applies to professional leagues, including Major League Soccer and the National Women's Soccer League, as well as to youth soccer organizations and tournaments. The USSF also negotiates collective bargaining agreements with both the U.S. men’s and women’s national teams. In doing so, the USSF pursues policies that position both national teams to ably represent the country in the highest of international competitions. The USSF has encountered controversy in recent years, particularly over its dealings with the national teams. The USSF and the U.S. women’s national team recently clashed in court and before the U.S. Equal Employment Opportunity Commission over accusations of gender-based wage discrimination.

The Foundation and USSF have not only co-existed for nearly three decades but they have also collaborated on grants and other ventures. In fact, the Foundation was founded by former USSF president and 1994 World Cup bid chairman Alan Rothenberg while he was in office, and he is one of three past or present USSF presidents currently on the Foundation’s board (Sunil Gulati and Carlos Cordeiro being the others, according to the Foundation's website). That esprit de corps appears to be over. Both non-profits are now locked in a legal battle over the Foundation’s use of “U.S. Soccer Foundation” and related logos.

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Understanding the Foundation’s viewpoint

The Foundation insists that it has used these marks without any opposition or controversy since at least 1996. It has done so primarily for identification purposes. The Foundation contends that consumers identify “U.S. Soccer Foundation” as identifying the Foundation and no other entity—including the USSF. Therefore, when the Foundation provides goods and services bearing the “U.S. Soccer Foundation” name and accompanying logo, there is a predictable relationship between the name, logo and provider.

The Foundation emphasizes that this dynamic is neither accidental nor circumstantial but rather a result of a smart and deliberate strategy. It has also been an expensive strategy. The Foundation claims that it has “invested millions of dollars into building and sustaining substantial goodwill” through the marks. Indeed, these marks appear in one form or another in virtually every operational aspect of the Foundation: letterhead, annual reports, advertising materials, official statements, the Foundation’s website, social media accounts, uniforms, shirts—the list goes on and on. Essentially, the Foundation contends that it is the U.S. Soccer Foundation and to assert otherwise would defy reality.

Meanwhile, the Foundation contends that the USSF has “never” used “U.S. Soccer Foundation” or associated marks. In fact, as the Foundation retells history, the USSF has exhibited complete indifference towards the Foundation using such marks. To bolster that point, the USSF has allegedly never attempted to exert control or stipulate parameters over how the Foundation uses the marks, nor has the USSF reached any agreement with the Foundation as to how the marks must be used. Likewise, the USSF has allegedly not pursued enforcement actions with the U.S. Patent and Trademark Office during the more than two decades in which the Foundation has repeatedly used the marks. If you believe the Foundation’s narrative, it’s as if the USSF doesn’t care.

Until now.

As revealed by the Foundation’s complaint, the USSF has adopted a new and starkly different mindset. The USSF now demands that the Foundation cease all use of the marks in question. Ed Foster-Simeon, the president and CEO of the U.S. Soccer Foundation, told SI.com that this demand was first raised in August. At that time, Foster-Simeon was stunned to hear USSF officials insist on the Foundation abandoning its long-used marks. They also informed Foster-Simeon that their two entities would no longer collaborate.

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The USSF’s demand became more threatening during a meeting between Foundation and USSF officials in November. It was then when USSF officials relayed four crucial representations: (1) the USSF, and not the Foundation, owns the name “U.S. Soccer Foundation” and related marks; (2) the USSF plans on using “U.S. Soccer Foundation” for its own services in the future; (3) the Foundation’s use of “U.S. Soccer Foundation” has caused, and will continue to cause, consumer confusion; and, of greatest impact, (4) the USSF demands that the Foundation not only cease using “U.S. Soccer Foundation” as a matter of practice but that it also contractually agree to change its name. If the Foundation fails to satisfy these demands, the USSF warned that it would initiate legal action.

The USSF has not explained its change in position. However, the Foundation’s complaint surmises that the USSF’s attempt to—in the Foundation’s words—“hijack” marks stems from future business opportunities. The Foundation believes that USSF’s maneuvers constitute a “likely effort to capitalize on lucrative business opportunities when the United States hosts the World Cup in 2026.”

Alex Wong/Getty Images

Understanding the USSF’s likely viewpoint

Regardless of its purpose, the USSF’s demand is not without legal authority. The U.S. Patent and Trademark Office lists the USSF, and not the Foundation, as the rightful owner of a handful of trademarks for “U.S. Soccer Foundation.” This is true for gym bags, T-shirts and other apparel. It is also true when “providing services to advance the sport of soccer in the United States; namely, conducting workshops, sports clinics, and seminars in the field of soccer” and when “providing services to advance the sport of soccer in the United States, namely, fund raising, program development, grant making, and scholarships.”

The USSF’s registrations are also not new. USSF attorneys registered these marks in the late 90s and early 2000s. These registrations were also approved by the U.S. Patent and Trademark Office after exhaustive reviews. Registration, it should be noted, provides legal benefits to its registrants (owners). Those benefits include a statutory presumption that the mark is valid, the registrant is the owner of the mark and the registrant has the exclusive right to use the registered mark. All of these factors advantage the USSF.

The Foundation insists that evidence of trademark registrations is hardly dispositive as to who owns and who can use the marks. In an attempt to counter the significance of registrations, the Foundation contends that the USSF previously acknowledged the Foundation to be the marks’ “actual owner.” According to the Foundation, the USSF “acted as if it believed the Foundation” controlled the marks back in 2009 and 2010. During those years, the Foundation says it awarded grants to the USSF and those grant agreements—which the USSF presumably signed—required the USSF to “first provide notice to the Foundation” before employing the now-disputed marks. To the extent evidence supports this claim, the Foundation can argue with some persuasion that both parties understood that the Foundation could not only use the marks but to some extent control them, as well.

Breaking down the legal claims and likely defenses

While the question of who owns “U.S. Soccer Foundation” is not a matter of life or death, the Foundation regards a prospective name loss as an existential threat. A rebranding campaign would be costly and could disrupt the Foundation’s fundraising and marketing efforts. Even if the Foundation doesn’t lose its name, it maintains that it has already been damaged by the USSF. The Foundation argues that an “unreasonable delay” at the hands of the USSF to assert intellectual property rights essentially set up the Foundation to fail. Over a 22-year period, the Foundation has relied on specific marks to build a distinguishable identity and marketable brand. The Foundation says it never received any notice or warning that such reliance was problematic. It now has to fight to keep that identity.

The Foundation hopes that Judge Kelly and potential jurors will come to the rescue. The non-profit’s complaint draws heavily from the Lanham Act (the Trademark Act of 1946), which is the primary federal law for trademarks and covers a wide-range of disputes. The complaint pleads five claims against the USSF: (1) declaratory judgment of non-infringement; (2) declaratory judgment of no liability for infringement due to several defenses (laches, abandonment, waiver, estoppel and unclean hands), (3) rectification of the trademark register; (4) unfair or deceptive trade practice (under D.C. consumer protection laws); and (5) unjust enrichment.

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The Foundation has retained a prominent law firm to wage the litigation. Quinn, Emanuel, Urquhart & Sullivan are experienced in legal controversies in soccer and other sports. Attorneys from this firm represent FIFA in connection with U.S. and Swiss criminal investigations into bribery and fraud as well as in related prosecutions. They also successfully defended the Dallas Cowboys in a trademark infringement case over whether the Cowboys are, in fact, “America’s Team.” Scott Lerner and other attorneys from Quinn Emanuel will advocate for the Foundation.

The litigation will center on several key legal issues to which the Foundation and the USSF will offer dueling perspectives. Perhaps most important is the extent to which consumers are confused by “U.S. Soccer Foundation.” Courts review trademark infringement cases by assessing whether consumers are likely or unlikely to be perplexed as to the source of a specific mark. If consumers tend to be confused, then use of the mark by the non-owning party—the Foundation—would be deemed infringement.

Courts use eight factors to determine consumer confusion. One of those factors is evidence of actual confusion. To illustrate how “evidence of actual confusion” could play out, the Foundation and the USSF might offer survey data and other empirical findings to prove opposite points: the Foundation wants to persuade the court that consumers aren’t confused by “U.S. Soccer Foundation” and that they know that it refers to the Foundation, whereas the USSF will argue that many consumers are confused. To bolster that point, the USSF could point out that the USSF was instrumental in the creation of the Foundation. The historical links between the two entities could cause some consumers to conflate them. If consumers aren’t confused, the USSF might insist that they will be confused once the USSF uses the mark with greater frequency.

This raises the importance of how the court determines the characteristics of “consumers” in the context of these two soccer organizations. If “consumers” refers to knowledgeable soccer fans who buy soccer merchandise, the Foundation would likely be advantaged. After all, the soccer community is probably more familiar with “U.S. Soccer Foundation” than the casual American consumer or even the typical American sports fan who might not be as well versed in soccer as other sports. If instead “consumers” is more broadly defined, then the USSF would be poised to benefit. Many Americans may not know to which entity “U.S. Soccer Foundation” refers.

Another of the eight factors is the intent in selecting the disputed mark. The Foundation will insist it selected “U.S. Soccer Foundation” because the mark so closely approximates “U.S. Soccer Federation Foundation.” Therefore, it provides a useful and abbreviated source of identification. The USSF will counter by arguing that “U.S. Soccer Foundation” also closely matches its name and that the Foundation’s intent was to free-ride off of the USSF brand and co-opt marks owned by the USSF.

The likelihood of expansion of the product lines is yet another of the eight factors. The USSF is poised to assert that it has substantial plans to expand its product lines. For instance, the USSF could detail anticipated sales figures associated with the 2026 World Cup and other ventures where it intends to use “U.S. Soccer Foundation.” The USSF would reason that it must assert the exclusivity of the marks in order to avert consumer confusion with the Foundation’s use of the same marks. In response, the Foundation will likely downplay the USSF’s plans and contend that it will mainly be “business as usual” for both entities in the coming years.

The court will also review the Foundation’s depiction of the USSF as having “abandoned” its marks. To prove abandonment, the Foundation must establish that the USSF doesn’t use the marks and—importantly—has no intent to engage in such use. The USSF will likely rebut the Foundation by pointing out forthcoming plans to use the marks. If the USSF intends to market “U.S. Soccer Foundation” for goods and services pertaining to the 2026 World Cup, a court would be less inclined to find that the USSF has abandoned related marks.

Likewise, the court will consider whether the USSF has “unclean hands” in the trademark dispute. A finding of “unclean hands” would be appropriate if the USSF has engaged in fraud, deceit or bad faith to the detriment of the Foundation. Courts are usually reluctant to make such a finding in the absence of definitive evidence. The Foundation might maintain that the USSF willfully allowed the Foundation to build “U.S. Soccer Foundation” brand over a period of 20 years in order to then steal the value of that brand through a trademark claim. The USSF will reject such an account as outlandish and unsupported by actual evidence.

The Foundation’s demand for a rectification of the trademark register will also spark tension. A rectification would entail altering the register so that the Foundation, and not the USSF, is listed as the marks’ owner. Alternatively, it would lead to cancellation of the marks (presumably the Foundation would then quickly attempt to register them). The court would have to issue a court order directing the U.S. Patent and Trademark Office to make such changes. The Foundation contends that the continued registration of the USSF unfairly harms the Foundation and must be changed. In response, expect the USSF to insist that such a judicial move would be grossly interventionist and would disrespect the expertise of the U.S. Patent and Trademark Office in having decided that the USSF is the owner. The USSF might also claim any court order along those lines would destabilize all trademark registrations: if a court, which lacks the same level of expertise in trademarks as the U.S. Patent and Trademark Office, can overrule the experts and decide trademark ownership on its own, then trademark owners should be wary of relying on their registrations.

The laws of the District of Columbia, where the Foundation is headquartered, are included in the Foundation’s complaint. Specifically, the Foundation invokes D.C. Code § 28–3904, which concerns unfair or deceptive trade practices. The statute makes it illegal to misrepresent sponsorships. The Foundation contends it would be a violation of the statute for the USSF to claim to have used “U.S. Soccer Foundation” and related logos. The Foundation warns such a claim would “mislead consumers into believing the Foundation sponsored, approved, or was affiliated with the USSF’s activities.”

Lastly, the Foundation argues that the USSF would be unjustly enriched if a court granted it control over the “U.S. Soccer Foundation” mark. The Foundation stresses that numerous charitable deeds and other successful ventures have made this mark quite valuable, and that it was the Foundation—and not the USSF—that performed those deeds and ventures. The Foundation contends that the USSF shouldn’t be able to reap the fruits of the Foundation’s labor.

Dispute could be resolved by settlement

While the Foundation and the USSF are now on opposite sides of a federal case, that case could end long before a trial. The Foundation’s complaint would be dismissed if the two sides work out a mutually-beneficial arrangement. Perhaps the USSF would agree to license the marks to the Foundation in exchange for the Foundation agreeing that both can use the marks and perhaps also agreeing to pay a licensing fee or to promote the USSF in marketing efforts.

Unless the USSF is certain that its business model needs the “U.S. Soccer Foundation” mark to succeed, the USSF might reconsider a legal fight with the Foundation. Such a fight could wreak havoc on the Foundation, especially if its operating name were stripped. At the same time, the USSF could suffer negative publicity if the public concludes it is trying to destroy an organization that does a good deal of charitable work. This is true even if the USSF proves it has the legal right to exclusively control U.S. Soccer Foundation: there is always a difference between what can be done and what ought to be done.

If no settlement is reached and if the case advances past a motion to dismiss, both sides would be subject to pretrial discovery. During it, witnesses from both entities would have to provide sworn statements. In addition, each side would be given access to sensitive emails, texts and other correspondences.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.

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