Endorsement Deals Intellectual Property

Two Apparel Giants in Suit Over New Jet, Tim Tebow

The following article was written by Cyle Kiger.

Nike, Inc. (plaintiff) and Reebok International Ltd. (defendant) are involved in a suit over improper use of apparel regarding the polarizing figure, Tim Tebow.  Nike, whom Tebow exclusively authorized and licensed to use his name on apparel on March 24th, 2010, is suing Reebok for unfair competition, misappropriation of rights of publicity, tortious interference with current and prospective business relationships and unjust enrichment.

Nike is preparing to unveil the jerseys of all 32 teams in the league on April 3rd.  For Nike to take full advantage of the short-lived trade between the Denver Broncos and New York Jets, they claim they needed to be the exclusive manufacturer of New York Jets Tim Tebow apparel.  Nike argues that because of the “short-lived” event, consumers that receive Tebow gear from Reebok will have no need to purchase Nike’s apparel.

According to the claim, as of March 21, 2012, Reebok has attempted to take advantage of the trade between the Denver Broncos and the New York Jets for one of the most ‘exciting’ players in recent history.  Nike obviously wants to take full advantage of the sales, and claims that Reebok is preventing them from doing so.

The National Football League allows licensed apparel companies two grants of intellectual property rights:  trademarks of the NFL and its clubs and players’ names and numbers through a group license. However, to obtain the single player naming rights, manufacturers have two options: directly enter into an exclusive contract with the player or, as Nike has done, enter into a group license with NFL Players Incorporated.  This group license is essentially the superstore of publicity rights for the 1,700 NFL players.

Reebok’s group license with NFL Players Inc. expired prior to March 1, 2012 and Reebok did not obtain permission or consent from Tebow to produce Jets related apparel.   As Reebok’s license expired, Nike’s group license with NFL Players Inc. had commenced.

In order for Reebok to legally use the NFL Marks (color, design and logos) and Tebow’s name and number, the apparel giant would need to have current licensing rights with both parties; Reebok lacks both.

Becoming involved almost immediately, Tebow advised Reebok that the company was misusing his name.  He went on to demand that Reebok remove any Jets apparel with his name.  Reebok did not respond.

The Claims for relief are the following:

Reebok’s use of Tebow’s name on New York Jets apparel is likely to cause confusion among consumers.  As a result, Nike has and will continue to suffer damages as long as Reebok profits due to Tebow’s name and likeness.  Nike claims it is entitled to recover Reebok’s profits from the Tebow sales under the Lanham Act.

Lanham Act:  Relating to the Commerce Clause, the act provides a system of trademark registration and protects the owner of a trademark against the use of similar marks that result in consumer confusion.

Nike claims that Reebok has misappropriated Tebow’s name for commercial purposes.  Law protects people, such as Tebow, from being exploited by companies for their own benefit.   His right of publicity is what protects him, and other celebrities, from commercial interest.  Publicity rights may be violated in the same sense as misappropriation while using a person’s name or likeness.   Nike claims that Reebok has caused the company, along with Tebow, harm that is irreparable through its actions.

In the third claim for relief, Nike alleges that Reebok wrongfully and intentionally interfered with retailers of the New York Jets apparel.  The conduct Reebok has shown in the past week with the issue is a direct attempt to diminish Nike’s opportunity to provide Tebow’s Jets apparel. Nike claims that retailers, current and prospective, would have contacted Nike for the Tebow apparel had Reebok not wrongfully distributed their own unlicensed Tim Tebow apparel.

Reebok is allegedly unjustly enriching themselves with Tebow’s name and celebrity.  The company is unlawfully using the name to promote, market, advertise and sell New York Jets apparel.  Nike believes that they should receive the amount of money Reebok profits from the sale of said apparel.

Nike is asking for relief from the Court as part of a final judgment that Reebok should be restrained from manufacturing, selling, distributing, promoting and advertising any unauthorized Tim Tebow products.  The plaintiff also advises Reebok to repurchase, recall and destroy any Tebow-wear that is unauthorized along with advising all retailers that selling the unauthorized apparel may expose them to liability.

UPDATE:  U.S. District Judge Kevin Castel favored Nike in a court order that blocks Reebok from selling New York Jets apparel with Tebow’s name on it.

Nike claims that it should be awarded actual damages for the alleged intentional misconduct on Reebok’s behalf, punitive damages for the violation of Tebow’s rights of publicity with the connection of commerce and attorney fees.

Nike seems to have a fair claim, as Reebok’s licensing rights came to a halt a few weeks ago.  Tebow has caused quite the uproar across the country since entering the NFL, and will presumably continue to do so.  As Nike, seemingly, is on the top of the podium in the sports apparel world, the company will not suffice to any of its competition now that they have a stranglehold on the National Football League for the next five years.

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