Esports are on a very strange knife's edge right now, and Adidas opposing ELEAGUE's trademark on their logo is a great example of how. Esports are growing rapidly and with rapid growth comes the attention of bigger brands. But, Adidas probably wouldn't have cared about ELEAGUE's attempts to trademark their logo if esports wasn't as big as it is.
Last week, it came to light that Adidas is opposing ELEAGUE's filing to trademark the ELEAGUE logo for digital media and marketing services. ELEAGUE's trademark for their logo in the entertainment services category was granted in December, but Adidas filed an opposition to the other two filings on Oct. 10. They may have missed their shot the first time around, but they've come back around for a reason.
It's pretty hard to argue that esports isn't growing. Traditional sports investors are putting huge amounts of money into the scene, leagues are franchising, things are actually starting to stabilize for the first time in a while. But esports isn't so big that the EU LCS isn't having troubles, that smaller teams can't subsist in a top-heavy market and that companies like Adidas bother with opposing ELEAGUE's trademark. Investors look at things like that and see that esports is shakier than the money flowing into the scene might suggest.
Looking at Adidas' opposition, they definitely have some legal ground to stand on. Adidas' trademark includes the phrase "The Brand With The 3 Stripes," along with a specific diagonal configuration of said stripes that really does look like the ELEAGUE logo. Plus, it doesn't really matter that ELEAGUE's logo is visually distinct. On paper, ELEAGUE and Adidas both use three, offset, diagonal, black stripes. Adidas just used them first.
On the other hand, if you just look at the two logos, you can tell they're different. Adidas' logo is just three stripes, while ELEAGUE's is specifically an "E" without the connecting vertical line. This could go either way, depending on how a trademark examiner rules. But it doesn't really matter who wins. The fact that Adidas is actually opposing ELEAGUE on this trademark is proof enough that huge companies are paying attention to esports — just not in the way we necessarily want.
Businesses look at just about everything in terms of profits and losses. Esports are not quite profitable by default yet, not for most organizations and definitely not on a scale as grand as traditional sports leagues. The LCS, the biggest esports league, has historically been run at a loss, while major teams like Immortals, are reportedly operating at a loss. So, with that in mind, Adidas looks at esports (which they've been aware of for a long time) in terms of where they can make their money, and this is one of those ways.
Presumably, Adidas wants to block ELEAGUE from using this logo. Their argument is that the ELEAGUE logo's similarity to the Adidas logo would confuse consumers and dilute the brand. Honestly, I don't think anyone is looking at the ELEAGUE logo and seeing Adidas, and I'm willing to bet Adidas doesn't think that's happening either. What Adidas sees is a chance to block the ELEAGUE logo, which primarily benefits Adidas in that it tightens their hold on their trademark, and costs ELEAGUE some money, in theory.
Essentially, esports is just another avenue for massive business like Adidas and Time Warner to stage legal battles, which could be frightening to an outside investor. Adidas isn't going out and sponsoring a bunch of esports teams, they're looking for a chance to challenge a trademark. The best case scenario is that this all blows over, and peopel get a lot more wary about their logos. Worst case is that ELEAGUE goes through a (presumably costly) full rebrand. Either way, Investors might have to look harder at say, the upcoming Overwatch League teams' new logos, before deciding to funnel their money into some new esports brand.
I'm not saying that Adidas getting on ELEAGUE for the logo similarity is the end of esports. I'm simply saying that this is discouraging. Making a completely original brand that has absolutely no similarities to any other is pretty tough these days. For example, the word "ELEAGUE" (yes, in all caps) was filed for a trademark by a guy named Arthur George Monto in September 2015. It's mostly about traditional sports, but it's straight-up biblical: there is nothing new under the sun.
It'll take time for esports to grow bigger, and there'll be more friction like this until it does. It might not take the form of more public legal challenges like this, it might end up more in back rooms, in attempts to convince investors to jump in, but it'll happen. Esports can grow despite all this, but it's a step off the path in a direction esports doesn't need right now.
Grade C- — Adidas has the legal right and means to challenge ELEAGUE on the logo trademark, and they could very well win and either block the applications or reach some sort of settlement. But win or lose, the fact that the opposition is public and has attracted media attention will give people more reasons to slow down growth in esports.