Author: Sarah Nadon – Law Student
Edited By: Ryan Carson
When many see the “Klaw” logo, they associate it with the former Raptors all-star, Kawhi Leonard. The logo was created by Nike Corp based on a sketch drawn by Kawhi Leonard when he was in school, but just because many people associate the logo with Leonard does not mean that he is its rightful owner. According to a recent ruling by a United-States federal judge, the logo created does not belong to him; it belongs to Nike.1
Last summer, there was a widely reported feud between Nike, the largest sports apparel company and Kawhi Leonard over the ownership of the “Klaw” logo. The logo is of Leonard’s large hand, which inside contains his initials “KL” and the number 2, which he had worn on his jersey for much of his basketball career.2 Leonard was adamant that he had the idea to create a logo which incorporated his initials and the number "2" into a drawing of his hand and before entering the Nike Contract, he created the "Leonard Sketch" as a draft of that idea. Over the course of the next few years, Nike developed variations of the logo, while Leonard states that he had the final say over the logo's final appearance.
In 2018 when the endorsement deal ended, Nike and Leonard parted ways, and Leonard demanded a court to declare that he is the sole owner of the logo and that Nike fraudulently registered the logo with the United-States Copyright Office in Washington D.C.3 While Leonard was filing his lawsuit, Nike disputed Leonard’s story and sued him for copyright infringement, breach of contract and fraud.
Litigation originally began in Southern California but moved to the U.S. District Court for the District of Oregon, giving Nike a home-court advantage. Judge Michael Mosman presided over the case.4 On April 22, 2020, Mosman J. heard Nike’s Motion for Judgement. Mosman J. stated that ownership over the “Klaw” design turns on the Nike contract entered into by Leonard. Paragraph 8 of the contract states:
OWNERSHIP OF NIKE MARKS, DESIGNS & CREATIVES.
(a) [Leonard] acknowledges that NIKE exclusively owns all rights, title and interest in and to the NIKE Marks and 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 . . . or [Leonard] in connection with this Contract;5
The judge held that the Nike contract established Nike’s ownership of the logo because the “klaw” logo was (1) a new piece of intellectual property and (2) created “in connection” with the Nike contract.
While throughout the case, Nike asserted that this was a tale of two images, Leonard consistently refers to the “Leonard Logo.”6 This is because Leonard’s theory is that no new intellectual property was created over the course of the Nike contract; instead, the “Klaw” logo is the finished result of mere modifications to the logo Leonard has created independently of Nike. The judge rejected that theory during oral arguments.
Next, the judge analyzed whether the “Klaw” design was created “in connection with” the Nike contract. If the logo was created in connection with the contract, Nike owns it. Leonard’s argument was that the contractual language “in connection with” is ambiguous and unconvincing.7 The purpose of the Nike contract was to pay Leonard for “the use of [Leonard]’s personal services and expertise in the sport of professional basketball and [Leonard]’s endorsement of the Nike brand and use of Nike products.”8 According to Leonard, at some point during the contract, Nike wanted to create a logo for the merchandise to be sold under Leonard’s Nike contract. The “Klaw” logo was created and affixed to merchandise that Leonard wore and endorsed and Nike sold.9 Not only was this activity done in connection with the Nike contract, but it also represented the entire point of the Nike contract. Since the logo was created under the Nike contract for the purpose of endorsing both Nike and Leonard, Nike owns the design and the right to register a copyright for it.
Furthermore, the judge granted in part and denied in part Nike’s counterclaims, which included a declaratory judgement of copyright ownership, copyright infringement, copyright right cancellation for fraud on the copyright office, breach of contract paragraph 8, breach of contract paragraph 13 and breach of contract paragraph 21.10 The judge granted breach of contract under paragraph 21 as the contract states that any dispute arising under the contract should be litigated in an Oregon court. Leonard filed his action in the Southern District of California.
Nike was granted copyright ownership and, in part, breach of contract but denied judgement on other counterclaims. Leonard’s lawyers are currently weighing their options on what to do next.
In 2018 when the endorsement deal ended, Nike and Leonard parted ways, and Leonard demanded a court to declare that he is the sole owner of the logo and that Nike fraudulently registered the logo with the United-States Copyright Office in Washington D.C.3 While Leonard was filing his lawsuit, Nike disputed Leonard’s story and sued him for copyright infringement, breach of contract and fraud.
Litigation originally began in Southern California but moved to the U.S. District Court for the District of Oregon, giving Nike a home-court advantage. Judge Michael Mosman presided over the case.4 On April 22, 2020, Mosman J. heard Nike’s Motion for Judgement. Mosman J. stated that ownership over the “Klaw” design turns on the Nike contract entered into by Leonard. Paragraph 8 of the contract states:
OWNERSHIP OF NIKE MARKS, DESIGNS & CREATIVES.
(a) [Leonard] acknowledges that NIKE exclusively owns all rights, title and interest in and to the NIKE Marks and 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 . . . or [Leonard] in connection with this Contract;5
The judge held that the Nike contract established Nike’s ownership of the logo because the “klaw” logo was (1) a new piece of intellectual property and (2) created “in connection” with the Nike contract.
While throughout the case, Nike asserted that this was a tale of two images, Leonard consistently refers to the “Leonard Logo.”6 This is because Leonard’s theory is that no new intellectual property was created over the course of the Nike contract; instead, the “Klaw” logo is the finished result of mere modifications to the logo Leonard has created independently of Nike. The judge rejected that theory during oral arguments.
Next, the judge analyzed whether the “Klaw” design was created “in connection with” the Nike contract. If the logo was created in connection with the contract, Nike owns it. Leonard’s argument was that the contractual language “in connection with” is ambiguous and unconvincing.7 The purpose of the Nike contract was to pay Leonard for “the use of [Leonard]’s personal services and expertise in the sport of professional basketball and [Leonard]’s endorsement of the Nike brand and use of Nike products.”8 According to Leonard, at some point during the contract, Nike wanted to create a logo for the merchandise to be sold under Leonard’s Nike contract. The “Klaw” logo was created and affixed to merchandise that Leonard wore and endorsed and Nike sold.9 Not only was this activity done in connection with the Nike contract, but it also represented the entire point of the Nike contract. Since the logo was created under the Nike contract for the purpose of endorsing both Nike and Leonard, Nike owns the design and the right to register a copyright for it.
Furthermore, the judge granted in part and denied in part Nike’s counterclaims, which included a declaratory judgement of copyright ownership, copyright infringement, copyright right cancellation for fraud on the copyright office, breach of contract paragraph 8, breach of contract paragraph 13 and breach of contract paragraph 21.10 The judge granted breach of contract under paragraph 21 as the contract states that any dispute arising under the contract should be litigated in an Oregon court. Leonard filed his action in the Southern District of California.
Nike was granted copyright ownership and, in part, breach of contract but denied judgement on other counterclaims. Leonard’s lawyers are currently weighing their options on what to do next.
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References
1 Sports Illustrated, News Release, “Kawhi Leonard Loses Copyright Lawsuit Against Nike Over Logo (April 23, 2020) https://www.si.com/nba/2020/04/23/kawhi-leonard-loses-lawsuit-against-nike.
2 Ibid.
3Ibid.
4 Ibid.
5Nike Contract [16-1] at 7.
6Kawhi Leonard v Nike Inc., ( D. Or. 2020)
7Ibid.
8 Ibid.
9Ibid.
10Ibid.
.