Merchandising In Sports Area – Practical And Legal Issues

According to the American Marketing Association the term merchandising is to be understood as the planning involved in marketing the right merchandise (product) or service at the right place, at the right time, in the right quantities, and at the right price. In the light of polish understanding merchandising is used to described marketing activity concentrated on benefiting from trade marks, presentations, images or symbols associated by clients with one product in order to improve sale results of the other product, addressed to the wide range of consumers and offered mainly in retail.

It is commonly known and benefited from as the merchandising can be a convenient instrument to foster such products like sports events (so called merchandising event) or a football, bascetball or hockey teams etc. It is enough to say as from several to several dozen percent of German or British football clubs’ revenue come from merchandising. Similar event can be found in case the american baseball, bascetball or hockey clubs, no matter professional or amatour. The merchandising opportunities are wide and various, depending on how large and strong is the relevant product to be supported by such an instrument as well as what is its potential of development.

One thing is sure that in effect any entity operating within actual sports surrounding is forced to use merchandising somehow in day-to-day activity to develop in a righ way.
Emotiones of sports, esspecially some of its disciplines, casue the sports funs ones of the most faithfull and devoted clients of a particular brand they root for.

The shops of those the most enterprising sports clubs offer almost everything – from the crowlers for the baby funs whose parents wish them to hereditate the love for the particular team, through cups, keychains, calendars and copy-books, bedclothes, wall-paper and all sorts of clothes and accessories for men and women, to the brands of food products in the end.

Another words, as American experts in sports merchandising used to day – the sky is the limit. The same happens with sports events – no matter we are talking about Ground Slam tennis tournament or domestic athletics meeting or interscholar competitions, each time there is a place for merchandise and gadgets distribution which bring not only financial profit but becomes effective instrument to promote the event.

Together with the awareness of profits from using the merchandising the reflection must come on how to get rights do use the merchandise reserved effectively and saved from infringement or at least have those infringements minimised. As it was pointed out above merchandising relays mainly on using trade marks, symbols etc. being associated and referred to particular merchandise, which in case of sports category means sports clubs, teams or sports events. The key question for sports club owners, sports competition managers or any other entities wishing to benefit from merchandising in any other way, occurs to be suitable registration of trade marks referring to their business activity as well as taking all available measures to execute their rights. Main legal act that abovementioned actions (on intellectual property) will be based on is the Act of June 30th, 2000 on industrial property, however depending on the actual case, other legal act may also be relevant, e.g. the Act of April 16th 1993 on fighting unfair competition.

The football club that should be seen as an example to others polish players on the merchandising market is called Lech Poznań. It has guarantied himself relevant rights with the benefit to its image and for its funs and continues to develop its merchandising offer, co-operating with relevant authorities and business partners in the scope of monitoring the actual infringements on the market. Taking examples from such an entity is not against the fair-play rules but it pose a good practice as an correct element of sport development, an unusual discipline of life and economy on the domestic market. The real Olympic games in sports’ merchandising are about to come on EURO 2012 being organised by Poland – lets wish we manage to learn how to use that instrument the best.

Tax Exemptiones

Since the January 1^st, 2007 the amendment of the Act on Personal Income Tax (herein called as the Act) has come into force, especially the new provisions on subject exemptions on tax obligation.

According to new legal regulations the personal revenue from sale of real estates or financial rights listed in the article 10 s. 1 ss. 8 lit.a) – c) of the Act are exempted from the income tax. The inter-temporary provisions however provide clearly that the amendment does not apply to real estates and the rights prescribed in the article 10 s. 1 ss. 8 lit.a) – c) when purchased or built (transferred for usufructs) till December 31^st , 2006.

As an example, the revenue resulting from the sale of the apartment that took place before January 1^st, 2007, not having been disposed according to purposes (within the given period) prescribed in the Act – in wording on a day preceding January 1^st 2007 - is subject to the tax obligation of a tax payer, together with the interest for a delay payment of such a tax obligation.

It is worth mentioning as the income generated from the sale of real estate needs to be declared upon a separate formula – PIT-23 (this revenue does not come together with revenues from other sources). Tax declaration then is a tax payer’s statement of will referring to his exact condition of tax obligation and as such it becomes a basis for taxation bodies.

Protection Of The Employee’s Personal Rights

Pursuant to the wording of the article 11¹ of the Labour Code an employer is obligated to respect dignity and other personal rights of an employee. The aforementioned provision constitutes one of the basic principles of the labour law and at the same time it constitutes one of the basic duties of employer towards an employee. The aforementioned provision does not indicate precisely what kind of personal rights are protected and among them mentions only a dignity. However an exemplary specification of the personal rights is included in the article 24 § of the Civil Code, which indicates inter alia following personal rights: health, freedom, honour, freedom of conscience, name and pseudonym, image, secrecy of correspondence. The aforementioned provision finds its application in the labour law on the grounds of the article 300 of the Labour Code, pursuant to which, in the events not specified by the labour law provisions to the labour relationship are accordingly applied provisions of the Civil Code unless they are contrary to labour law principles.

It is worth mentioning that the provisions of the Civil Code shall also have an application in the case of violating by an employer of some of employee’s personal rights. Pursuant with the provision of the article 24 § 1 of the Civil Code, a person whose personal rights were threatened by someone else’s behaviour, may request giving up of such an omission, unless it is unlawful. In the event of breach he may also claim, that a person who had committed such a breach, make a statement with an appropriate content and form. Moreover, on the basis provided in the Civil Code he may also demand a financial compensation or payment of an appropriate amount for a social objective. The basis of protection of specified employee’s personal rights may also constitute provisions of the Act on Copyrights and Neighbouring Rights or Industrial Property Act.

Also the Labour Code provides a number of legal remedies to which an employee is entitled in the event of breaching his personal rights by an employer. One of such a remedies, which is of profound practical importance, is the article 55¹ § 1 of the Labour Code, pursuant to which in the event of a gross breach by an employer of substantial employer’s duties (and thus a duty of respecting of employees’ personal rights) an employee may terminate a contract without notice.

It should be also remembered that a legal remedy to which an employee is entitled shall be dependent on the character of the infringed personal right. For example when an employer sullies the good name of an employee by providing false information, an employee may be entitled to claim an employer to make an appropriate statement (article 24 § of the Civil Code). However when it comes to an infringement of an employee’s personal copyrights, an employee shall be entitled to make use of claims provided in the Act Copyrights and Neighbouring Rights.

Civil Liability Of Limited Liability Company Bodies

The matter of civil liability of persons holding a function of a limited liability company bodies seems to be regulated in the Code of Commercial Companies in a complete and without raising any doubts manner (the articles 291 – 300 of Code of Commercial Companies).

By enforcing the liability of company bodies certain problem however may constitute the wording of the article 293 § 3 of the Code of Commercial Companies, pursuant to which the member of the management board, supervisory board, audit commission, likewise the liquidator, shall discharge his duties with a degree of diligence proper for the professional nature of his activities.

As the members of doctrine and jurisprudence underline, the aforementioned article 293 § 2 introduces a special type of a an increased diligence of company bodies.

Few doctrine representatives raised that fulfilling duties of a limited liability company body, without proper education, knowledge or experience necessary to manage the affairs of the company should be treated as a violation of the required diligence and conscientiousness. It is also raised, that a person performing a body’s duties (in this case the member of management board) may not release himself from his liability merely on the grounds that he was executing the resolutions of a supervisory board.

Among not numerous judgements issued on the grounds of this article should be mentioned the judgement of the Supreme Court of 9^th February, 2006 (V CSK 128/05), which grounding includes a thesis, pursuant to which establishing the lawlessness, within a meaning of the Article 293 § 2 of the Code of Commercial Companies, may not be limited merely to a general statement that an action or omission was contrary to law or company agreement, but should also indicate – by reference to a specified provisions of law or company articles of association – in which resulted a contradiction of the bodies members conduct with a specified provision of law or articles of association.

In the aforementioned judgement the Supreme Court did not agree with a view of the lower instance court, that an action or omission contradict to law or provisions of articles of association constitutes already a mere breach of the Article of 293 § 2 Code of Commercial Companies, and thus a diligence duty resulting from a professional character of actions of specified company bodies or company liquidator. A diligence measure indicated in this provision constitutes a fault criterion and its fulfilment does not release from a duty of establishing a lawlessness.

The aforementioned judgement of the Supreme Court in my opinion casts a new light on the problematic of the professional diligence, which is mentioned in the Article 293 § 2 of the Code of Commercial Companies, referring it exclusively to a fault criterion. However pursuant to the thesis of the aforementioned judgement of the Supreme Court and also the views of a doctrine, a professional diligence of the members of company bodies is based inter alia on provided by company’s articles of association division of competencies between particular members of its bodies and observance by them of binding provisions. Thus it rises a question, whether even a model fulfilment of such requirements by the members of board fulfils entirely the notion of professional diligence?

In my opinion the requirement of adherence to the principle of diligence by the members of company bodies, mentioned in the article of 293 § 2 of Code of Commercial Companies code should be also related to possession by them of specialised education, used during fulfilment of bodies’ duties (for example a criterion of professional diligence of an attorney at law fulfilling a function of a company body member – the member of a supervision board). Such matters require undoubtedly supplementing by court judgements.