Even after winning the 2019 NBA championship with the Toronto Raptors and being named NBA Finals Most Valuable Player, Kawhi Leonard has found himself occupied in an intellectual property dispute with his former sneaker and apparel endorser, Nike.
The two-time NBA champion filed a lawsuit last Month against Nike claiming that he is the author of his famed handprint logo, “The Klaw,” and that Nike committed copyright infringement pertaining to its use.
The logo’s ownership is likely to be determined by a thorough examination of the endorsement contracts between Leonard and Nike. The contracts are important to Leonard’s future use of the mark because he is no longer a part of Nike and its Jordan brand after signing with New Balance in 2018.
Leonard likely wants to license the use of the logo to New Balance, which he cannot do if he is not the owner.
The lawsuit asks that the court declare that: (i) Leonard is the sole author/owner of the logo; (ii) Leonard’s use of the logo does not interfere with Nike’s intellectual property rights; and (iii) Nike committed fraud when registering the logo for copyright protection.
According to the lawsuit, the original logo can be traced back to Leonard’s time at San Diego State University. The language specifically claims that while there, he “contemplated and conceived of ideas for a personal logo.” Conception of an idea and its application into a physical manifestation are key elements for an intellectual property protection analysis.
Leonard intended to create a logo that displayed his unique qualities. Leonard is known for his extremely large hands, something that NBA personnel and fans know quite well. Therefore, Leonard asserts that the impetus for the logo itself stemmed from hands that the entire league has talked about since Leonard was drafted in 2011.
In addition, there has been a history of edits that Leonard has made to the logo to refine it. In December 2011 or January 2012, Leonard updated a previous version of the logo he had been working on for several years without the input of Nike.
Leonard also allegedly possesses eyewitness testimony from close confidants that describes how he shared his idea with those close to him before Nike’s involvement.
From Nike’s point of view, it will likely rely on the endorsement agreements with Leonard. Nike claims, through the last correspondence with Leonard in March, that it owns all intellectual property rights in the logo. Nike also demanded Leonard cease from his personal use of the logo.
The original deal obligated Leonard to provide “personal services and expertise in the sport of professional basketball and endorsement of the Nike brand and use of Nike products.” According to Leonard, the negotiations did not include a discussion regarding transfer or license of the logo, nor anything regarding Leonard’s work on the logo inuring to Nike’s benefit.
As Leonard’s popularity rose with his rise to stardom with the San Antonio Spurs, Nike negotiated extensions of the agreement. In these subsequent discussions, Leonard claims that Nike attempted to provide suggestions on the logo, most of which he rejected. However, Leonard authorized their proposals of variations to the logo as long as Leonard retained final control over its commercial use.
Leonard agreed to one such variation in June 2014, authorizing Nike to affix a proposed alteration of the logo to their merchandise. It appears that the authorization may have been connected to one of Leonard’s contract extensions with Nike, however without having the actual terms, it is a tough determination to make.
Despite Nike’s work on alternative logos, Leonard and his team allegedly made it clear that Leonard was effectively licensing the use of the logo to Nike only for preapproved uses. Leonard insists that several communications support this assertion, including many that reference the logo as “Kawhi’s Logo,” supporting the contention that Nike understood the logo was Leonard’s property.
Nike’s ownership can also be rebutted by Leonard’s use of the logo outside of Nike contexts and events, without permission from Nike. Leonard used the logo at personal basketball camps, charity events and on other non-Nike apparel sold commercially.
However, a fact that could work in Nike’s favor concerns impermissible use by third parties. In instances where Leonard felt that the logo was being used impermissibly, his representatives would contact Nike, who would agree to assist in the cease and desist operations against infringers.
As far as actual copyright registration goes, Leonard claims that neither he nor his associates were aware that Nike submitted a copyright registration for the logo or that it had been approved. On the application submitted to the U.S. Copyright Office, Nike claims to be the owner and claims Nike created the logo in 2014, the year in which they created the single variation.
If Nike does have an approved application, Nike then has the exclusive right to reproduce, publish or sell the original creation. An approved application functions as presumptive ownership, with the ability to pursue others for infringement and be given protections against counterfeit goods.
Leonard also has approved applications, however, his are with the U.S. Patent and Trademark Office. Leonard was granted logo trademarks, with the application noting that he had developed the logo and used it for applications outside of Nike merchandise.
Trademark registration provides similar benefits as copyright registration does in that both help a holder of the registration argue that they are the true owner. Leonard states that this trademark is the basis for his pseudo-license to Nike for its use.
A win in the lawsuit would allow Leonard free use of the logo for new ventures, including for a possible new campaign with New Balance, or it may give Leonard control of the logo. Leonard’s attempts to limit Nike’s use of the logo therefore aids both his interests and those of New Balance.
This conflict is likely headed for an eventual settlement, whereby Nike will acquiesce to Leonard’s ownership of the logo in exchange for a term license for Nike to use the logo. However, Nike may also want to continue to litigate and maintain that it is the true owner because of Leonard’s new relationship with rival New Balance.
This association would make it seem like Nike would no longer be interested in marketing Leonard to its consumers. On June 3, the two sides filed a joint motion asking for additional time to respond to the allegations, alluding to a possible settlement already in the works.