SBJ/June 25 - July 1, 2007/This Weeks News

Court to hear Fuse LLC, Omnicom in battle over moniker

Questions, calls and e-mails overwhelmed Bill Carter in late March. Strangers and friends alike asked the managing partner of Fuse LLC the same thing: Had his youth marketing and advertising company been sold to Omnicom?

Fuse LLC has worked with brands such as the
AST Dew Tour for more than a decade.

The questions were a response to a press release put out March 28 by Omnicom Media Group. The publicly traded company announced a new division with four of its sports and entertainment marketing agencies being renamed Fuse Sports and Entertainment Group.

The name was similar to the one Carter’s company had been using since 1995, and it has become the contentious subject of a trademark lawsuit in Vermont district court. A judge is expected to hear early arguments on Tuesday during a preliminary injunction hearing about who has the right to the name Fuse.

Court filings to date shed light on the battle ahead between the small Vermont marketing agency with 35 employees and the global company with $17 billion in market cap. The filings also illuminate the value agencies place in their name and the potential conflict that can emerge in the crowded and relatively small sports marketing industry.

“Fuse is a fairly unique name,” said Ben Clark, an intellectual property attorney with Bryan Cave. “Any time you’ve got a trade name that the consuming public associates with one entity, that name can have value.”

Fuse LLC filed the lawsuit after Omnicom refused to stop using the name Fuse. The Vermont independent alleges that Omnicom’s Fuse will confuse the marketplace and infringe on Fuse’s existing trademark, according to filings. The fear is that potential clients could associate the two firms or contact the wrong one for business.

LIGHTING A FUSE

Fuse LLC
Created: 1995
Owner: Partners Bill Carter, Brett Smith and Issa Sawabini
Location: Burlington, Vt.
Services: Though many of its clients are active in action sports, the agency offers experiential and event marketing, public relations, advertising, video production and Web site development. It is focused on youth and young adults.

Fuse Entertainment and Sports Group
Created: March 28, 2007
Owner: Omnicom
Location: New York City
Services: The new division features the services of Optimum Entertainment, an entertainment marketing business; Optimum Sports, a sports marketing division; Full-Circle Entertainment, a brand-marketing business; and Highway Entertainment, a content distribution firm.

Source:
SportsBusiness Journal

Executives for both Fuse LLC and Omnicom declined comment on the pending litigation.

Founded in 1995, Fuse LLC helped corporate America embrace action sports. It currently works with Mountain Dew, Burton and Slim Jim. Sponsors and properties consider it one of the most credible sports marketing agencies in action sports.

When NBC, one of Fuse’s clients, explored the possibility of launching an action sports series, NBC executives pitched the idea to Carter first. It was his approval that gave NBC the confidence to launch the AST Dew Tour, now in its third year.

“They are probably the smartest people within action sports,” said Kevin Monaghan, vice president of business development for NBC. “They understand the athletes, the sport, the culture — all of it.”

Fuse LLC fears that Omnicom is trying to trade on that reputation by using a similar name. Its case for injunctive relief focuses on Omnicom’s familiarity with the Vermont agency in order to prove that allegation.

Fuse partner Carter claims several Omnicom agencies explored buying Fuse on multiple occasions. He also says that Fuse worked with Omnicom subsidiaries on multiple occasions, including a 2001 Mountain Dew photo shoot of professional athletes with Omnicom’s TLP.

Today, the two agencies share clients, including Pepsi and Sony PlayStation, Fuse’s injunction says, and Tom McGovern, a co-director of one of the sports agencies set to become part of Omnicom’s Fuse group, is “personally acquainted with” Carter and other Fuse employees.

Omnicom denies most of those claims, conceding only that its subsidiaries may have discussed a business combination with Fuse LLC and that McGovern has met Fuse employees.

It also denies the charge that its new division’s name, Fuse Entertainment and Sports Group, infringes on Fuse LLC’s trademark, saying the trademark is fraudulent because Fuse LLC did not have exclusive use of it prior to registering it.

Advertising Age wrote that Fuse had not sought similar litigation against Fuse Advertising in St. Louis or Fuse Interactive in Laguna Beach, Calif. But Carter says Fuse LLC has an agreement with the St. Louis group to use the name and does not consider the Laguna Beach company a competitor, according to AdPulp.

“The acquiescence doctrine for other companies sounds better on paper than it does in court, so it tends not to carry the day as much,” Clark said. “Unless it’s watered down the strength of the Vermont company’s mark, acquiescence standing alone won’t carry the day.”

Clark said the case ultimately will come down to proving that there’s a likelihood of confusion. Notes in the Vermont-based Fuse’s filing attempt to show that by including an unsolicited e-mail from a “BG Stine” saying: “Saw the article about Fuse Sports and Entertainment but can’t locate any contact info. Looking for mailing address, phone, email, etc?”

“If that can be used as evidence,” Clark said, “that is the type of actual confusion they’ll need to show.”

Fuse helped New Balance set up shop at the X Games.

Marketing executives say two agencies named Fuse could hurt both of them in what is already a crowded marketplace. John Cimperman, principal of Cenergy Sports and Entertainment, has experienced that firsthand. His agency’s name is similar to Synergy Events marketing, and he often gets calls from prospective clients looking for the other firm.

“While there’s no infringement, you want to avoid that confusion as much as possible,” Cimperman said.

Current and former clients of both groups said that coming across two Fuse agencies with a sports focus would raise a red flag.

“Seeing the same name, I would think they were related,” said Kevin Milhomme, a senior integrated marketing associate with New Balance, which works with Fuse LLC. “It’d be like if there were two Omnicoms or two IMGs.”

Sharon Shapiro, who worked with Fuse and Omnicom in her former position as senior director of promotions and sports product marketing for Sony Computer Entertainment America, said it’s difficult to say whether that possibility would affect the way the Vermont-based Fuse is perceived in the marketplace.

But she added, “It appears that’s a risk Bill (Carter) and his agency are unprepared to take.”

Omnicom stands firm in its belief that there is no likelihood of confusion between its new agency’s services and the existing Fuse’s services. It even renamed its group to focus more on entertainment, changing it from “Fuse Sports and Entertainment Group” to “Fuse Entertainment and Sports Group.”

But Carter remains unconvinced. In a statement after the lawsuit was filed, he said, “We will never allow Omnicom to use our name, no matter what the cost, and no matter how long this takes, we will defend ourselves from them as if our professional lives are at stake because, in fact, they are.”

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