A prolonged conflict regarding Kalshi's utilization of Liga MX trademarks and team names has escalated to federal court.
The Mexican Football Federation (FMF), which oversees soccer in Mexico, initiated legal proceedings against Kalshi in the Southern District of New York on September 22.
In its lawsuit, FMF is requesting a temporary restraining order along with preliminary and permanent injunctions to prevent Kalshi from using the Liga MX trademark and associated club names. Additionally, the federation seeks compensation for alleged profits that Kalshi gained from this purported infringement.
FMF contends that Kalshi's use of the Liga MX trademark may mislead consumers into thinking that the prediction market is officially connected to Liga MX or its teams.
For nearly a year, Kalshi has been embroiled in legal battles with regulators over the applicability of state laws to its federally regulated sports event contracts.
This lawsuit introduces a new legal challenge regarding Kalshi's use of sports trademarks, questioning the extent to which the exchange can employ trademarked league and club names for market identification.
FMF's lawsuit centers on its objection to Kalshi's continued use of Liga MX and club names on its website and apps for prediction markets related to Liga MX events.
The federation asserts that Kalshi has ignored repeated requests to cease this practice. Moreover, FMF takes issue with Kalshi's reliance on its data to determine the outcomes of these markets.
FMF's complaint states, “Kalshi’s market rules designate FMF’s data as the facts that determine whether a wager wins or loses.”
FMF maintains that it never authorized Kalshi to utilize its data, the Liga MX trademark, or club names for these markets.
The conflict began on July 17, when FMF's legal counsel, Rafael García Job, sent a cease-and-desist letter to Kalshi, demanding the cessation of its use of the Liga MX logo, club logos, and other protected trademarks.
In response, Kalshi argued on July 21 that its use of the Liga MX trademark and club names fell under nominative fair use. Although it removed some logos and included disclaimers, it continued to use the Liga MX and club names.
Kalshi's General Counsel Richard Heaslip informed FMF that the matter was “closed,” according to the lawsuit.
FMF reiterated its demands on July 27, insisting that Kalshi halt its use of the Liga MX trademark and club names.
On August 6, Kalshi's Head of Litigation, Jovalin Dedaj, responded by again invoking nominative fair use, asserting that its usage was limited to “plain-text identification” for its CFTC-regulated markets.
FMF, however, disagreed and enlisted Blank Rome LLP to manage the dispute in the U.S. On August 18, the law firm issued another cease-and-desist letter, giving Kalshi 10 business days to comply.
As of September 1, Kalshi once more rejected FMF’s stance, leading to ongoing disagreements over whether Kalshi can use Liga MX and club names merely to inform customers about its market offerings.
In the lawsuit, FMF characterizes Kalshi's argument as asserting that its use of the Liga MX name is necessary for customers to clearly understand the subject of each event contract.
In its response to FMF’s attorneys on September 1, Kalshi cited Apple as an example to bolster its argument.
The complaint notes that Kalshi has drawn an analogy between its use of the Liga MX mark and investment firms like Vanguard and JP Morgan using the Apple trademark to identify stock investments.
FMF counters this by highlighting that Kalshi has successfully identified other sporting events without resorting to certain protected names.