As a sports fan (I am very glad that baseball is back!) and an accountant, I am always interested when the sports and business worlds overlap. Registrations for sports related trademarks and the value of professional baseball teams indicate that sports are not just entertainment, they are big business. One of the giants in the sports (and business) world – Nike – is providing additional evidence of this overlap as it fights intellectual property related battles related to copyright, patent and trade secrets.

  • Copyright – Nike is fending off copyright infringement charges from a photographer claiming that his picture of Michael Jordan dunking a basketball was the inspiration for Nike’s “Jumpman” logo (a silhouette of Mr. Jordan dunking a basketball) that adorns its Michael Jordan branded products. Even a small percentage royalty (if Nike were to lose the case) on Nike’s estimated $2.6 billion of Jordan sneakers could be a significant sum.
  • Patent – Nike alleges that rival Adidas is infringing on a Nike patent for knit shoe uppers. Nike introduced its first knit running shoe in February 2012. Adidas’ allegedly infringing knit running shoes followed in July 2012. Adidas appears to have the upper hand on this issue (Nike’s patent has been invalidated) but Nike is appealing the ruling.
  • Trade secrets – Nike has filed a separate action against Adidas related to three of Nike’s senior product designers who were hired by Adidas late last year. Nike alleges that the three designers possess unreleased product designs and marketing plans. In this case, Nike appears to have the upper hand – having secured a temporary restraining order against the designers – although the designers have filed counterclaims of their own against Nike.

As the industry leader, none of these disputes likely threaten Nike’s market leading position. Nonetheless, they are yet another reminder that the sports apparel and equipment that is used by millions of Americans (whether in professional, youth or weekend leagues and games) is just as much about “big business” (with its associated legal issues) as it about fun, sports and entertainment.

What do you think – would the loss of the “Jumpman” logo impact Nike’s ability to sell shoes? Will these legal disputes affect Nike’s leading position in the sports apparel and equipment industry? Please share your thoughts in the comment box below.


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