Riley's Trademark Aids More Than Team

Wordplay can be serious business. Just ask famed NBA coach and now Miami Heat president Pat Riley.

Fresh off the Heat’s second straight NBA championship, the legendary story of Riley having been savvy enough 25 years ago to trademark the term “three-peat” is being resurrected once again – and Riley is not the only one who stands to benefit financially.

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After all, Riley works to raise money through a variety of charitable efforts. Among those is The Miami Heat Family Outreach which, according to the Miami Heat website, he and his wife founded in 1997 and has raised more than $15 million for the South Florida community. Primary beneficiaries include a center for seriously ill children, a domestic violence shelter for women and their children and the Miami Coalition for a Safe and Drug-free Community. Riley is also involved in the Pediatric AIDS Foundation’s Kids for Kids organization which they started in 1992 in New York. He’s been involved in other charity efforts as well.

Now, he could combine that savvy business move with a stellar NBA season to further benefit those in need.

According to Fox Sports Florida, Riley gets a portion of the proceeds when “three-peat’’ is used on apparel and for other marketing purposes, including when the term is on mugs, plates, posters and bumper stickers. Plenty of such stuff was sold when some of the most popular teams in sports history went back to back to back over the past two decades.

“We have over the years made a considerable amount of money off that trademark and most of it, a good portion of it, always goes to charity,’’ said Riley, who has won nine NBA championship rings as a player, assistant coach, head coach and executive but never three in a row. “It goes to foundations and stuff. But I do have a partner in it.’’

So how did Riley even come to be in this position of making coin off a coined term?

The story goes that it was Los Angeles Lakers star Byron Scott who actually came up with the term during the 1988 Lakers victory parade. LA had already won two in a row and Scott blurted out the word with the hopes of winning the following year. Shortly after, Riley, who at the time was the Lakers head coach, mused during a conversation with a friend about whether he could somehow make money off the term.

The whimsical concept turned into a serious reality with Riley forming a licensing group that then registered “three-peat” as a trademark with the U.S. Patent and Trademark Office web site. From that point on, anyone printing the word “three-peat” on clothing, hats, towels or mugs would owe Riley a percentage. Riley even struck a licensing agreement with the NBA. When did he cash in?

Sadly, the Lakers failed to make it three in a row after getting swept by the Detroit Pistons in 1989, but don’t cry for Riley. While there’s no public information on how much money Riley has raked in by owning the term, it’s estimated that after the Lakers’ arch rivals the Chicago Bulls won three straight championship titles from 1991 to 1993, Riley scraped 5% off the top of all sales of apparel and novelties with the word “three-peat” on them.

But what are the realistic numbers?

According to trademark and copyright attorney Jeff Sladkus of The Sladkus Law Group, Riley appears to be very much on top of renewing his protection of the terms, perhaps a clear sign that his original trademarking of the word has paid off. Sladkus, who does not represent Riley, says it’s a good bet that Riley has made anywhere from 5 to 10 percent from “owning” the word.

“There are more or less industry standards for licensing fees,” he said. “With the deals I’ve done in the past for apparel, those average around 7 percent, so anywhere from 5 to 10 percent would not be abnormal. (Riley) still owns them: four registrations for different variations. “Three peat” “Threepeat” “3-peat” and “3peat.” Some of his licenses he has are for bumper stickers, decals, novelties. You need to show the trademark office examples of how you’re using it. The packaging indicates he licensed the trademark to a third party who manufactured it.

“With clothing, it looks like (Riley) has had a tougher time. There’s a nuance when you’re selling clothing: when you trademark something, it’s usually for use on the back of the clothing tag. Riley has Threepeat on the shirt. That’s just ornamentality. It’s not protectable but he relied on the exception: if you’ve been using it for five years ornamentally, you get to retain the trademark royalties. I would think that in a situation like this, Riley would get a royalty on the sale of the manufacturer to the retailer, 5 percent of the gross.”

Keep in mind that in today’s terms, trademarking a word like “three-peat” is somewhat like having locked in a url or website name starting with the letter ‘i’.. sure to vex Apple in its quest to own everything from iPhone to iChat to i-you-name-it.

When the Bulls pulled off a repeat of the three-peat from 1996 to 1998, it was money in the bank again for Riley who by then had done a stint as the New York Knicks’ head coach and then had landed in Miami.

Riley has yet to make money off a team he’s coached or run. None have hit the three-peat status, triggering those pennies from NBA heaven. The Heat are close, but Riley knows how that goes from his Laker days.

And he knows how to best take advantage of his trademark.

“When you get a trademark registered, you need to show evidence that it’s still being used within the fifth and sixth year of registration,” Sladkus said. “On the 10th anniversary you have to show that it’s still being used. After that 10th year renewal, it’s good for the next decade. You gotta use it or you’ll lose it.”

With the ever-elusive three-in-a-row championship wins out of reach for now, it still has the rest of us wondering how to make money off words, with or without friends. If you’re thinking about registering “four-peat,” forget it.

Apparently a third party in Chicago has already locked that one in.

“Five-peat?” Now you’re just dreaming.