Property, intangible

a blog about ownership of intellectual property rights and its licensing

One Work or Two?

I read the headlines about Johnson v. Nike with passing surprise, because the case was decided of on a motion to dismiss. The designs aren’t that different and what crossed my brief attention led me to think that it was a copyright infringement case about the similarity of these two designs:

But it is really a contract case, and a fairly simple one at that, thus the resolution on a motion to dismiss.

Leonard and Nike had a contract which said:

If you can’t see the image, it says:

  1. OWNERSHIP OF NIKE MARKS, DESIGNS & CREATIVE. [Kawhi Leonard LLC] (a) acknowledges that … NIKE shall exclusively own all rights, title and interest in and to any logos, trademarks, service marks, characters, personas, copyrights, shoe or other product designs, patents, trade secrets or other forms of intellectual property created by NIKE (and/or its agents), [Kawahi Leonard LLC] or [Kawahi Leonard, an employee of Kawahi Leonard LLC] in connection with this Contract …

So the language is clear – Nike will own all rights, including copyright, in any work created by either Nike or Leonard during the term of the agreement.

Which means that in order to win, Leonard has to argue that his design, which everyone agrees predated the endorsement contract, was the same as Nike’s ultimate final design, the “Claw Design.” If Nike’s design is not created during the contract, but instead existed already, then Leonard would own it, not Nike.

Just eyeballing them, you would say they are different works. The K and L are created using different fingers and the hands are quite different in proportion and style. But the pleading also didn’t help Leonard’s cause:

While Nike asserts that this case is a tale of two images, Mr. Leonard refers throughout the pleadings and his briefings to a singular “Leonard Logo.” See, e.g., Resp. [ECF 57] at 5. As discussed extensively at oral argument, this is because Mr. Leonard’s theory is that no new intellectual property was created during the term of the Nike Contract; rather, the “Claw Design” is a mere modification of a preexisting logo that Mr. Leonard designed and created independent of Nike and the Nike Contract. See id. I rejected that theory at oral argument and do not retread my analysis here. See Tr. [76] at 39-40. I supplement my remarks only to demonstrate that Mr. Leonard’s own pleadings—which I must accept as true for the purposes of this motion—reveal that, as a factual matter, the above two images are the relevant images in play.

First, there is no dispute that Mr. Leonard conceived of the idea for a logo involving his initials and his hand prior to entering the Nike Contract. Compl. [ECF 1] ¶ 17.

Second and third, Mr. Leonard describes that “[i]n late December 2011 or January 2012, Leonard refined a logo he had been creating for several years that encompassed his large and powerful hands, his initials and his jersey number” and that, at some point prior to Spring 2014, he sent this logo design to Nike. Id. ¶¶ 18, 25-26. This logo design is the only physical expression of Mr. Leonard’s idea that Mr. Leonard alleges he sent to Nike. While Mr. Leonard refers to this logo design as the “Leonard Logo,” his answers to Nike’s counterclaims reveal that, at this point, the factual image we are talking about is the “Leonard Sketch” copied above. Nike Countercl. [16] ¶ 26; Leonard Answer [26] ¶ 26 (admitting that during the term of the Nike Contract, Mr. Leonard sent Nike the “Leonard Sketch”).

Fourth, after Mr. Leonard sent Nike the Leonard Sketch, the Nike design team reviewed the Sketch and sent Mr. Leonard proposals for a “modified” version of the Leonard Sketch in Spring 2014. Compl. [1] ¶ 26. Mr. Leonard rejected those proposals. Id. ¶ 27. “In early Summer 2014, Nike provided additional proposals to Leonard using the [Leonard Sketch].” Id. ¶ 28. “Leonard accepted one of the June 2014 proposals and granted Nike permission to affix that logo, based upon the [Leonard Sketch], on Nike merchandise during the term of the Nike Agreement.” Id. ¶ 29 (emphasis added). “[T]hat logo” is the “Claw Design.” Nike Countercl. [16] ¶ 28-29; Leonard Answer [26] ¶ 29 (admitting that the “Claw Design” was affixed to Nike merchandise that was worn and endorsed by Mr. Leonard). And for the reasons stated at oral argument, the Claw Design constitutes a new, distinct piece of intellectual property. Tr. [76] at 6-9, 39-40.

So it’s not a question of whether Nike infringed Leonard’s copyright in his sketch; Nike had permission to use Leonard’s sketch. And it’s not a question about whether Leonard may freely use his sketch – he can, but he presumably doesn’t want to, preferring to use the trademark associated with him, the Claw Design. The legal question is only whether there are two works or one, and there was sufficient evidence of two to decide the case on a motion to dismiss.

The court also denied Nike’s motion for a judgment on the pleadings for most of its various counterclaims, granting it only on ownership of the Claw Design and that Leonard breached the forum selection clause in the agreement.

Leonard v. Nike, Inc., No. 3:19-cv-01586-MO (D. Or. May 18, 2020).

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