Cricketing legend Sachin Tendulkar has settled his dispute with Australian bat-maker Spartan Sports regarding the breach of a sponsorship agreement, with Spartan paying a hefty, and publicly disclosed, settlement sum, cancelling valuable trade marks and delivering a public apology. This case shows the risks of public disputes with high-profile celebrities.

Key takeaways

 

Celebrity endorsement deals can be highly valuable but fraught with public relations risks.

 

Disputes with celebrities over the terms of these agreements have to be navigated carefully, taking into account the undesirability of alienating a passionate and loyal fanbase.

 
Who in your organisation needs to know about this?

 

General counsel.

 
Case summary - caught behind (in payments)

 

Sachin Tendulkar is a former captain of the Indian national cricket team and is widely regarded as one of the greatest batsmen in cricket history. In June 2019, Mr Tendulkar brought proceedings against Australian bat-maker Spartan Sports International in the Federal Court of Australia, for breach of a worldwide exclusive sponsorship agreement to use his name and image on sporting goods.

 

Mr Tendulkar claimed that Spartan agreed in July 2016 to pay US$1 million per year in royalties under a licensing deal to use his image to sell 'Sachin by Spartan' products. The imagery included a distinctive silhouette logo of Mr Tendulkar performing his signature square cut batting shot superimposed with the words 'Sachin'.

 

Mr Tendulkar alleged that Spartan had failed to make the payments at the end of the 2017 and 2018 financial years, following which he terminated the agreement. Despite this, Spartan continued to use Mr Tendulkar's image in social media posts. Mr Tendulkar also alleged that Spartan engaged in misleading or deceptive conduct by using his likeness to signify that he endorsed Spartan's products despite not having done so since the termination of the agreement in 2018.

 

Mr Tendulkar sought orders that the products bearing his name and image be relinquished or destroyed, and an order that the trade marks registered to Spartan featuring Mr Tendulkar's silhouette be cancelled. Additional orders were sought that the court permanently restrain Spartan from manufacturing and selling products using his image or those trademarks, and from making the allegedly misleading representations.

 
Terms of settlement

 

In May 2020, the parties settled the proceedings, with judgment for Mr Tendulkar being entered in the sum of $2 million. As part of the settlement, Spartan is permanently restrained from using Mr Tendulkar's name, image or likeness and making the allegedly misleading representations.

 

Spartan has also cancelled the trade marks featuring Mr Tendulkar’s silhouette. The COO of Spartan delivered a public apology to Mr Tendulkar for its failure to honour the sponsorship agreement, and Spartan has publicly acknowledged that Mr Tendulkar has had no association with Spartan since 17 September 2018.

 
Lessons

 

Judicial commentary on the issues in dispute is not available following the settlement.

 

However, this matter demonstrates the dangers of infringing the rights of a prominent figure. The publicly disclosed settlement sum borne by Spartan and its loss of the valuable trade marks illustrate the heavy price of failing to comply with sponsorship agreements and of the misuse of IP rights.

 

It is likely that at least one of the reasons it was in Spartan's interest to settle the matter instead of participating in lengthy and public court proceedings was Mr Tendulkar's celebrity. Perhaps Spartan realised that putting the estimated one billion cricket fans in India offside by clashing with one of its national icons was not its strongest play.

 
Actions you can take now
 
Understand the terms of your sponsorship agreements involving celebrities.
 
Do not use IP beyond the terms of your sponsorship agreements.

 

 

For further information, please contact:

 

Miriam Stiel, Partner, Linklaters
Miriam.Stiel@allens.com.au