In a messy fight between a brand and a licensee, K2, Inc. and Rawlings last week filed papers asking for a new trial in a breach of contract suit case that saw Matrix Group Ltd, Rawlings bag licensee, awarded approximately $8.7 million by a jury earlier in May.
K2 and Rawlings argue that the “Jurys Verdicts In This Case Were Against The Clear Weight Of The Evidence” as the basis for their request for a new trial.
In another action in the same case, the judge last week ruled against Matrix in its motion for a permanent injunction enjoining Rawlings and its affiliates from “breaching its obligations under its exclusive license agreement” by making and selling bags using the Rawlings trademark, that compete with Matrixs equipment bags, or exceed the size restrictions on equipment bags set forth in the license agreement.
The jury had rendered three verdicts in the case in early May. The first verdict awarded Matrix damages in the amount of $4.1 million over the next ten years for Rawlings Breach of License Agreement. Second, the jury held in favor of Matrix for “a period beyond ten years” as a result of the same Breach of License Agreement, awarding the licensee $2.1 million in that verdict. Lastly, the jury held in favor of Matrix in its claim of “tortuous interference” against K2, awarding Matrix $2.5 million in that verdict.
K2 and Rawlings claim that the jury verdicts were unsupported by any evidence, particularly in Matrixs claim of lost profits. Rawlings stated that Matrix would have had to sell $1.2 million in bags in 2004 to justify the claim, a figure that would have been a 43% increase in sales from 2003, the last full year as Rawlings licensee. Rawlings said that level of sales would have been a “miraculous turnaround” since sales had declined for four straight years. The K2/Rawlings request also states that the jury award assumes that Matrixs bag sales would have increased each year for the next ten years, but no evidence was presented to support the assumption.
Matrix has been Rawlings bag licensee since January 1994. The current exclusive license agreement was inked in July 1996. The suit was first filed by Matrix in January 2004 and Rawlings counter-sued in February 2004. The cases were consolidated in April 2004 in the U.S. District Court in Missouri.