SAPA Benches Student-Athletes’ Royalty Rights

by: Jeli Leuterio 

Every year, UAAP and NCAA merchandise are sold to thousands of fans—shirts, bags, mugs, posters, lanyards, anything they can slap a name on. A huge profit has been made off of student-athletes’ fame. One of the retailers of UAAP and NCAA merchandise made about P20 Million worth of sales in 2016 alone.[1] You would think that the players would get a cut from these sales. Unfortunately, they don’t. Worse, if the school is the one selling, they actually can’t. Here’s why.

Generally, if someone uses your name, image, or likeness for profit, you’re entitled to be paid for it, just like in advertising. This is called the Right of Publicity, which was previously discussed in this article.  However, we have a law, called the Student-Athlete Protection Act (SAPA), which prevents student-athletes from being paid when the school uses their name, image, or likeness.

Section 5 of the SAPA provides an exclusive list of things that schools may give student-athletes. It states:

Sec. 5. Benefits and Incentives. – Schools may grant a deserving student-athlete the following benefits and incentives:

(a) Tuition and miscellaneous school fees including books and other learning materials;

(b) Full board and lodging;

(c) School and athletic uniforms including supplies, equipment and paraphernalia;

(d) A reasonable regular monthly living allowance, the amount of which shall be set and standardized by the athletic association to which the school is affiliated with;

(e) Medical examinations and consultations, emergency medical services, life and medical insurance and other reasonable and similar benefits that would further enhance the academic and athletic performance of the student-athlete; and

(f) Other reasonable and similar benefits that would further enhance the student-athlete’s academic and athletic performance.[2]

Anything that falls outside of the list would be a violation. Since merchandise royalties are not part of this list, schools are prohibited from paying student-athletes for using their persona on merchandise that they sell. The student-athlete is placed in a stalemate situation wherein he or she either allows the school to use of the persona for free or to not let the school use it at all. It’s a lose-lose predicament because the student-athlete wouldn’t benefit from either choice.

This prohibition actually contradicts several laws, the Constitution, the Civil Code, the Intellectual Property Code (IPC), and, by consequence, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. It violates the student-athletes’ right of publicity, right to property, due process, equal protection, unjust enrichment, and freedom to contract.

Constitution

The right of publicity is a property right recognized in the United States.[3] While the right of publicity has yet to be recognized in the Philippines, it’s arguably protected by section 1, Article III of the Constitution, which prohibits the taking of property without due process.[4] In this case, there is unjust taking of property because SAPA is simply applied. Student-athletes are automatically deprived of their property right without due process. There is no notice is given, no hearing conducted, and no opportunity to be heard.

The same provision in the Constitution provides for Equal Protection,[5] which states that folks who are similarly situated should be treated equally under the law. In this case, student-athletes are being treated differently from those of the same class, such as regular students. The right of publicity should apply to everyone. The SAPA makes it so that schools can pay regular students for using their persona but just because a student also happens to be an athlete, the school cannot pay him or her.

Civil Code

The Civil Code prohibits unjust enrichment.[6] Unjust enrichment happens when “a person retains money or property of another against the fundamental principles of justice, equity, and good conscience.”[7] In this case, the school is unjustly enriched by the profits from the merchandise that uses the student-athletes’ persona at the expense of depriving the student-athletes of their rights.

The Civil Code also provides for the freedom to contract.[8] This gives people the freedom to put whatever they want in a contract for as long as it’s not against public policy. In this case, the SAPA limits, without valid reason, what the school and its student-athlete can agree on in their contract. It does not allow the school to include a stipulation for compensation for the use of a student-athlete’s persona.

IP Code

The right of publicity includes the right to control and benefit from the use of one’s persona.[9] It’s counterpart in Philippine law is under section 169 of the IPC: False Designations of Origin; False Description or Representation.[10] This means that infringing right of publicity would mean contravening the IPC. The SAPA breaches student-athletes’ right of publicity and the IPC by diminishing their right to control the use of their persona. It prevents them from demanding compensation from schools for such use.

TRIPS Agreement

TRIPS is an international convention or treaty.[11] The IPC was enacted as part of our country’s obligation[12] as a member-state of the TRIPS.[13] This means that by enacting a law that contradicts the IPC, the Philippines is in breach of the Agreement. This could make it liable for monetary compensation and/ or international trade sanctions.[14]

The SAPA was enacted for the benefit of student-athletes. Sadly, by preventing schools for paying for the use of their persona, it does the opposite. It also contravenes several laws, as discussed above. All things considered, it’d be better if the list in section 5 were amended to include merchandise royalties.

Jeli Leuterio is a senior in Ateneo Law who is interested in pursuing a career in Intellectual Property. She is a former Ateneo cheerleader and fencer but now prefers baking and eating desserts.

(This article is an abbreviated version of Jeli’s J.D. thesis, which she has successfully defended. – Mickey)


 

[1] Alfred T. Jardenil, Jardy Marketing Universidad 2016 Sales Report (on file with author).

[2] An Act Protecting the Amateur Nature of Student-Athletes in the Philippines by Regulating the Residency Requirement and Prohibiting the Commercialization of Student-Athletes [Student-Athletes Protection Act], Republic Act No. 10676, § 5 (2015).

[3] USLegal, Right of Publicity, available at https://entertainmentlaw.uslegal.com/right-of-publicity/ (last accessed Aug. 15, 2017).

[4] phil. const. art. III, § 1.

[5] phil. const. art. III, § 1.

[6] An Act to Ordain and Institute the Civil Code of the Philippines [civil code], Republic Act No. 386, art. 22 (1950).

[7] Loria v. Muñoz, Jr. GR No. 187240, Oct. 15, 2014.

[8] civil code, art. 1306.

[9] USLEGAL, supra note 3

[10] Sanchez v. Hon Hernando, CA-G.R. SP NO. 104070 (Court of Appeals Jul. 7, 2009).

[11] World Trade Organization (WTO), Overview: the TRIPS Agreement, available at https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm/ (last accessed Aug. 15, 2017).

[12] Sehwani v. In-n-Out Burger, GR No. 171053, Oct. 15, 2007.

[13] WTO, supra note 11.

[14] WTO, The process — Stages in a typical WTO dispute settlement case, available at  https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s10p1_e.htm (last accessed Aug. 15, 2017).

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