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story.lead_photo.caption The “Running Razorback” emblem is used by the Razorback Foundation under what a University of Arkansas, Fayetteville official calls “an oral trademark license.”

The Razorback Foundation has free use of University of Arkansas, Fayetteville trademarks that others must pay to display, an arrangement set by “oral” agreements and university policy that outside attorneys find lacking.

The foundation bears the “Razorback” name, and UA’s “Running Razorback” emblem is the centerpiece of its official logo. A side silhouette of a forward-charging hog appears on the foundation’s website, fundraising documents and communication with donors.

UA and foundation officials have cited the nonprofit’s independence — it is governed by its own board of directors — and have said it receives no public money, so they can withhold from public release documents about foundation business that overlaps with the state’s largest university.

The University of Arkansas board of trustees is the registered owner of the Running Razorback and other UA marks, according to the U.S. Patent and Trademark Office. An open-records request for licensing agreements between the UA and other parties turned up a list of 11 outside groups, including NFL Films, Nissan and Walmart but not the Razorback Foundation.

Scott Varady, the foundation’s executive director, said UA board policy 100.7 authorizes the nonprofit to use the trademarks. The policy applies to “university affiliates,” such as alumni organizations, student organizations, faculty, students and “associated foundations.”

The term “associated foundation” — which is not defined in the policy — was “intended to cover entities separate from the institution that are established to support the institution financially or in other ways,” UA System spokesman Nate Hinkel said. The language about foundations was added to board policy in March 2017.

UA campuses and their units — such as the Criminal Justice Institute, for example — determine which foundations qualify as “associated foundations,” Hinkel said. There are more than a dozen “associated foundations.”

Because the Razorback Foundation existed before the university founded its trademark licensing program in 1988, its name was “grandfathered” into the licensing program, Hinkel said. Businesses with the sports team name in their titles — Razorback Discount Supply in Wickes, for example — were also grandfathered in, emails show.

But the foundation also has permission to use the Running Razorback logo. The logo was last updated in 2012. That permission to use the logo comes from the board policy and an “oral trademark license,” Hinkel said. Varady said permission came from the UA’s licensing office and athletic department’s executive committee.

Scott Andresen, a Chicago-based sports law attorney who works on trademark issues, said the board policy lacks the clarity and rigor of typical licensing agreements, potentially jeopardizing UA’s ownership of the marks. He also said his reading of the policy may give the foundation authority to use the university’s name but does not expressly say it can use its logos.

“This is a valuable mark,” Andresen said. “Is it not worth a couple of hours just to do a paper trail?”

To refer to the nonprofit, which regularly describes itself as an independent entity, as an “associated foundation” is contradictory, Andresen said.

“It sounds like they’re talking out of both sides of their mouth,” Andresen said. “They want the benefits without the obligation.”

The Arkansas Democrat-Gazette began scrutinizing the foundation’s relationship with the university amid questions about the costs of recent athletic department turnover, much of which was covered with donor money. The foundation also has a key role in the ongoing expansion and renovation of Razorback Stadium, a $160 million project to be financed mostly with public bonds.

The university’s athletics department, boosted by foundation support, is self-sufficient and transferred $3.2 million to the school’s general fund in fiscal 2017.

Varady has said the state’s open-records law does not apply to the foundation because it “receives no public funds from any public entity.” The foundation’s contract with a national search firm hired last year to help find a head football coach to replace Bret Bielema is among the documents Varady has declined to disclose.

The Arkansas Freedom of Information Act applies to records kept as part of official duties of an agency “that is wholly or partially supported by public funds or expending public funds.”

The newspaper’s ongoing examination of the foundation’s relationship with the UA has found:

The UA waived $12.7 million in Razorback Foundation cash commitments to capital projects. (arkansasonline.com/foundation1)

High-ranking staff members for both entities last year discussed a ticket-pricing change that would have shifted roughly $4 million per year from the university to the nonprofit. (arkansasonline.com/foundation2)

The UA committed to help the foundation raise more money from students by better promoting its “Collegiate Membership” program. (arkansasonline.com/foundation3)

The newspaper is reviewing 17,800 pages of emails exchanged between foundation staff members and about 30 university and UA System employees last year. Those emails were obtained through the state’s open-records law.

PROTECTING TRADEMARKS

Companies, individuals and groups — including colleges and universities — can register names, phrases, logos and other designs as trademarks with the U.S. Patent and Trademark Office. The process allows trademark owners to control the use of marks that are unique to them.

Higher-education institutions grew active in trademarking their names, logos and other designs in the late 1980s, said Jacob Rooksby, an intellectual property attorney in Pennsylvania and author of The Branding of the American Mind.

In the 1990s, colleges and universities began expanding their trademarks to, as an example, slogans and institutional programs, and began the “first wave” of going after local businesses that used their names, he said.

An associate dean at Duquesne University’s School of Law, Rooksby surmised that the UA board policy attempts to handle trademarks in a way that is going to be more efficient for all of the university system’s “affiliated foundations.”

“Is that a solution that is viable? Yeah, I think it is,” he said. “Is it the best way to do it? Is it the cleanest way to do it in that they’re making clear they can revoke the license? No, it’s not. The reality is they often view these organizations as one in the same with the university.”

Because of that, he said, they are often not motivated to follow all the formalities to the letter. The thought may be that if push came to shove, “these groups are going to do what we want anyway,” he said.

“That may be practically true,” Rooksby said. “But it doesn’t necessarily mean that for all purposes it will continue to be true.”

He specifically highlighted two cases that ended with the foundations splitting from the schools they were initially created to support, including changing their missions. He litigated one involving a national fraternity organization and its booster group.

“In most instances, the feeling is, ‘We’re going to get along indefinitely,’” he said. “No problem at all. But good lawyering would not accept that as an answer.”

Groups seeking to use trademarks must secure licenses from the registered owners, whose interests typically include maintaining strict rules on how the marks are used and securing a cut of the sales.

Those agreements often, but not always, require the license seeker to pay for the use, frequently in the form of royalties based on a percentage of sales.

It makes sense from a business standpoint for the UA to give free use to a foundation that exists solely to support the athletics department, said Andresen, the Chicago-based sports law attorney.

But that doesn’t resolve questions about whether the licensing agreement is legally sufficient or whether the foundation’s free use of the trademarks as an “associated foundation” contradicts its stance that it is legally separate, he said.

Registered owners who do not maintain proper control of how their trademarks are used can lose their rights to the marks, Andresen said. That includes not policing who is using the property, as well as inadequate agreements that don’t detail rigorous oversight over allowed use, sometimes referred to as a “naked license,” he said.

Among the policy’s omissions are clear definitions for terms such as “informal groups” and “associated foundations,” details about allowed use of the marks and a statement saying the UA retains the right to revoke the license, Andresen said.

“If they’re saying this [board policy] is all they’ve got and this is sufficient, I’d say you’re bordering on a naked license,” he said.

LOGO’S VALUE UNCLEAR

How much in monetary value the trademark represents to UA and the foundation is unclear. The UA System declined to disclose what it charges others who use the logo for commercial purposes, citing an exemption to the open-records law that allows agencies to withhold information that would put them at a competitive disadvantage.

“As I understand it, the agreements are individually negotiated in order to get the best value for the university relative to each request and [the licensed group’s] unique plans,” Hinkel said. “By disclosing amounts, that process could be compromised.”

UA’s standard royalty rate for trademark usage is 12 percent, according to IMG College Licensing’s website. IMG contracts with the university to license its trademarks to third parties. It’s unknown whether or how that standard rate would change when applied to a fundraising group.

Most, but not all, of the Razorback Foundation’s revenue is spent in direct benefit of the athletics department.

The foundation pays a minimum $12 million per year as part of an agreement that allows it to assign seats in sporting venues, which it does in accordance with how much money the people donate. It also pays portions of coaches’ and administrators’ salaries, contributes to capital projects and covers some department travel costs.

Some of its income is spent elsewhere, such as $2.4 million for management and general expenses and $3.1 million in reported fundraising costs in fiscal 2017. It raised $37.5 million in contributions that year and spent $30.3 million on program services, or athletic department and capital expenses, according to its audited financial statements.

Print Headline: Lawyers question UA logo sharing

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  • arkateacher54
    February 18, 2018 at 9:55 a.m.

    Lawyers - making trouble since 42 B.C.

  • NoUserName
    February 18, 2018 at 10:26 a.m.

    How is that? The Foundation, whose donations are tax deductible (or were...), is used by UA to skirt the FOIA. UA deliberately avoids putting things on paper (see oral licensing agreement). UA even told the foundation to not put anything on paper for the coaching/AD search specifically to avoid the FOIA. The whole foundation thing is a scam that this taxpayer doesn't feel the need to support. I hope a lawyer takes this scam down.

  • RazorWeevil
    February 18, 2018 at 11:36 a.m.

    Wow, imagine the UA athletic department allowing the foundation that raises funds for athletics to use its logo! Just one more silly attack by the Demozette on the "University of Arkansas, Fayetteville." And while I'm on the subject, when will your sports writers begin referring to Arkansas State as "Arkansas State University, Jonesboro" in all first references? Are they not aware that ASU has multiple campuses in Beebe, Mountain Home and Newport as well as Jonesboro?

  • NoUserName
    February 18, 2018 at 12:01 p.m.

    ^ point = missed. Not unexpected from a UA lackey.
    .
    "Are they not aware that ASU has multiple campuses in Beebe, Mountain Home and Newport as well as Jonesboro?"
    .
    So, are those equivalent 4 year colleges like, say, University of Arkansas Little Rock?

  • honesthap
    February 18, 2018 at 12:07 p.m.

    Right on, RazorWeevil. Perhaps, the U of A should now go by THE University of Arkansas (much like The Ohio State University).....that always bugged me; however, now I think I understand their intention. Guess that could also apply to The Arkansas State University. This is all, IMHO, caused by those who are pushing so hard to keep a game in Little Rock. I would be all for that if the game was The University of Arkansas vs The Arkansas State University.

  • obbie
    February 18, 2018 at 12:59 p.m.

    It's my understanding that the new tax law will do away with the 80% tax deduction of Foundation contributions. If so, then, let's abolish the Foundation and the U of A, (Fayetteville) raise the ticket prices to the same level. This will do away with most FOIA questions and shed some light on fundraising for athletics. Please don't shoot the messenger. I have to live here, too.

  • RazorWeevil
    February 18, 2018 at 1:43 p.m.

    Hmmm . . . Name calling? Really? If being a proud graduate of the University of Arkansas (the one in Fayetteville) and a lifelong Razorback fan makes me a UA lackey in your mind, then I have no problem with that. As for missing the point, apparently you have, and badly. Your taxes do not support the Razorback Foundation. People like me, through our voluntary donations, do. This is a non-story.

  • NoUserName
    February 18, 2018 at 2:15 p.m.

    So, you don't take a tax deduction for charitable donations to the foundation? Oh, I bet you do. I can only assume you must not understand how taxes work then. I didn't say the foundation got direct taxpayer funds. You're a UA grad, so I don't fault you for not understanding. As for being a lackey, it's not because you're rah rah UA, but because UA, a PUBLIC institution, is deliberately skirting state law - and trying to actively avoid it - and you're ok with that. It's not. And you shouldn't be.

  • RBBrittain
    February 18, 2018 at 5:33 p.m.

    The university allows the foundation to use Razorback trademarks without the usual royalties. Surely that should mean the foundation is "supported by public funds" and thus subject to FOIA, since public funds paid for the trademarks?
    .
    BTW, the ADG is following UA Board of Trustees policy, which says the proper name of the campus is "University of Arkansas, Fayetteville" -- no hyphen, no "at" (like UAFS, UALR, UAM & UAPB), but a comma. (It actually has a "The" in front of it like Ohio State in the resolution, but so do the four "at" campuses & UAMS; unlike Ohio State, no one actually uses it.) You can't omit "Fayetteville" in proper naming because legally "University of Arkansas", without modifier, means the ENTIRE SYSTEM unless the context requires otherwise (i.e., Arkansas Constitution, Amendment 35's naming a UA department head to sit on the Game & Fish Commission can only mean UA, Fayetteville).

  • RBBrittain
    February 18, 2018 at 5:43 p.m.

    The official BOT policy I'm referring to is at ht tps: //w ww.uasys.ed u/board-policy/100-4/ :
    .
    CHAPTER I: DESCRIPTION OF UNIVERSITY COMPONENTS

    1. General Provisions

    1.1 The University of Arkansas is a land-grant state university offering statewide educational opportunities ranging from certificate programs to post-doctoral study. Its principal campus units, divisions, and administrative units are:

    (1) The University of Arkansas, Fayetteville

    (2) The University of Arkansas for Medical Sciences

    (3) The University of Arkansas at Little Rock

    (4) The University of Arkansas at Monticello

    (5) The University of Arkansas at Pine Bluff

    (6) The Cammack Campus at Little Rock

    (7) Division of Agriculture

    (8) Arkansas Archeological Survey

    (9) System Administration

    (10) Criminal Justice Institute

    (11) Phillips Community College of the University of Arkansas

    (12) University of Arkansas Community College at Hope

    (13) University of Arkansas Community College at Batesville

    (14) University of Arkansas Community College at Morrilton

    (15) Cossatot Community College of the University of Arkansas

    (16) The University of Arkansas at Fort Smith

    (17) Arkansas School for Mathematics, Sciences, and the Arts

    (18) University of Arkansas Clinton School of Public Service

    (19) University of Arkansas System eVersity

    (20) University of Arkansas – Pulaski Technical College

    (21) University of Arkansas Community College at Rich Mountain

    1.2 These educational and administrative units, together with certain authorized adjuncts to each and those campuses or units later added by merger or otherwise, constitute the University of Arkansas for which the Board of Trustees is the governing board of control. These educational and administrative units are also referred to collectively as the University of Arkansas System.

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