A small
sports-licensing company in Westwood, Mass. has sued Nike
Inc. and the NBA Naismith Memorial Basketball Hall of Fame Inc. for fraud and
breach of contract over a proposed Nike line of Michael Jordan sportswear.
SportsFuzion Inc. claims Nike and the Hall of Fame's plans for a “Air
Jordan Hall of Fame” apparel collection circumvent a 2006 contract that it
said gave SportsFuzion exclusive sportswear licensing rights to the Hall of
Fame's trademarks and logos.

 

In a
press release, SportsFuzion claims that since 2006, it
has been the owner of the exclusive worldwide rights to the Hall of Fame’s
trade names, logos, trademarks, designs, and photos for use in sportswear. Under
its original agreement with the Hall of Fame, SportsFuzion is entitled to
collect nearly 90% of the net sales of Hall of Fame sportswear with the
remainder going to the Hall of Fame. The lawsuit was filed on Monday in Norfolk
Superior Court in Dedham, Mass., seeking
damages “in excess of $10 million.”

 

Scott
Zuffelato, a vice president at the Hall of Fame, told the Wall Street Journal
that it had no licensing agreement with SportsFuzion. A spokesman for Nike,
which has held rights to Michael Jordan-branded goods since 1984, declined to
comment.

 

The lawsuit
arrives as Nike has come up with a viral marketing campaign around Michael
Jordan's induction to the Hall of Fame, which is scheduled for September. A
microsite, www.getyourbasketballon.com, features
several videos of a fictitious character – Leroy Smith – who supposedly
inspired Michael Jordan to greatness. SportsFuzion said it is estimated that
NIKE could sell over $100 million of Michael Jordan Hall of Fame products
worldwide.

 

In its statement, SportsFuzion said that more than three years
ago, it had created the concept and a detailed marketing plan around a product
line for Michael Jordan’s induction into the Hall of Fame. 

 

“In 2005, I knew that Michael Jordan’s induction would be the
biggest event in the Hall of Fame’s history and, like his impact on the NBA and
the game of basketball, this product opportunity was enormous,” said Andrew
Mirken, president and co-founder of SportsFuzion.

 

“SportsFuzion was built around my love and passion for basketball
and my admiration for Michael Jordan,” said Mirken, who has coached high school
boys’ basketball for almost 20 years. 
“Having the opportunity to work with Michael Jordan and all of the great
athletes in the Hall of Fame was the dream of my lifetime.  Having NIKE and the Hall of Fame go behind
our backs to cut us out of the deal has become my worst nightmare.”

 

After entering into the exclusive worldwide license agreement with
SportsFuzion, senior level executives at the NBA helped arrange numerous
meetings for SportsFuzion with Adidas/Reebok, Mitchell and Ness,
and others in hopes of product partnerships being formed.

 

Beginning in the fall of 2006, SportsFuzion met multiple times
with top executives from Brand Jordan,
according to its statement.  After being
provided with a copy of SportsFuzion’s agreement with the Hall of Fame and
after being educated about the opportunity, NIKE turned SportsFuzion down.  Among the NIKE executives that considered
SportsFuzion’s proposal were Howard White, VP Sports Marketing Brand Jordan, who, on
November 21, 2007 wrote SportsFuzion saying, “I just wanted to let you know
that we’ve looked at the opportunity with the Hall of Fame from all
angles.  Our marketing people have looked
at it along with our product team.  At
this time the team feels that it’s not an opportunity that we can make
happen.  We really appreciate the time
and consideration that you’ve given us here in Brand Jordan with Michael going into the
Hall of Fame but we’ve explored every opportunity and at this current time
there isn’t a fit.”

 

Two months later in January 2008, the Hall of Fame contacted
SportsFuzion to “renegotiate” its contract. 
“It became clear to us that NIKE wanted to do a deal directly with the
Hall of Fame and that meant the Hall of Fame had to get out of their agreement
with us,” said Steve Barlow, co-founder, lead investor and SportsFuzion Board
Director. “It was a complete surprise when the Hall of Fame told us they did
not understand the totality of the rights they granted our company and that our
agreement was not good for the Hall of Fame. 
Nike’s recent Michael Jordan Hall of Fame launch was a total shock to us
because we had financed and built the company around this exclusive licensing
agreement, and always operated in good faith. 
We sensed something unethical was in the works – and unfortunately we
were right.”