There may be less to this lawsuit than some commentators think. Toronto Raptor star Kawhi Leonard, who is reported to have among the largest hands in the NBA, signed an endorsement deal with Nike in 2011, which ran through September of last year. Some Nike merchandise used the ‘Klaw,’ a logo that uses his initials to suggest his hands:
The parties apparently dispute to what extent they collaborated on creating this design. Kawhi says the logo is a trace of his hands. In May 2017 Nike applied for a copyright registration on the logo, referring to it as a work-for-hire. In November 2017 Kawhi filed a trademark application and ultimately received a registration. Kawhi intends to use the logo on non-Nike merchandise, Nike has claimed ownership, stating that he can’t. Kawhi filed this declaratory judgment action seeking a declaration of ownership.
There has been some commentary on this complaint that makes two points may be besides the point. The first is: ‘how is possible that there is no agreement as to ownership of the logo?’ The second is: ‘what happens when one party owns a copyright and another party owns a trademark in a work?’
First – you cannot get a handle on this dispute from just reading this complaint. The complaint admits there is a written endorsement contract (that was amended several times, and was in effect in 2017 when the parties filed their applications), but does not attach excerpts from the contract, nor does it quote language from the contract. Without having seen this contract, I will go out on a limb and speculate that there is a clause that provides for ownership of intellectual property created during the relationship between Kahwi and Nike (like, I bet, Nike owns its TV commercials), as well as a provision that provides for ownership and use of intellectual property and other rights that pre-dated the contract (such as Nike’s swoosh logo, and Kawhi’s rights of publicity) or was created outside the contract. If, for example, Kawhi wrote a soulful poem that had nothing to do with his endorsement contract, he probably retains ownership. And (still speculating here), the clause delineating IP inside and outside the contract is ambiguous enough that both Nike and Kawhi believe they own the logo. I will continue to speculate that the interpretation of said clause will determine ownership of both the trademark and the copyright in the logo. So it is not overly probable that there will be a copyright vs. trademark fact pattern here.
As long as we’re talking about Nike and ownership of IP relating to its endorsers – I spent sometime today down the TESS rabbit hole and saw that Nike owns or has owned trademarks such as LEBRON, LJ, MELO, and the KD logo. I can see why they would want to own these marks (as opposed to merely being licensees), and I can see why these stars shouldn’t allow it (I note that Lebron has had the LEBRON marks assigned back to him).[embeddoc url=”https://www.schwimmerlegal.com/wp-content/uploads/sites/833/2019/06/kawhi-2.pdf” download=”all”]