The lawsuit filed by SportsFuzion, Inc. against Nike, Inc. and the NBA's Naismith Memorial Basketball Hall of Fame will move forward after a September 9, 2009 hearing after which United States District Judge William G. Young will set a discovery schedule in the case, according to a release by SportsFuzion.
Nike is releasing its Air Jordan Hall of Fame Collection this week, which is made up of four different styles of Nikes (Air Jordan 1, Air Jordan 3, Air Jordan 2009, and the Six Rings). Earlier this summer, Nike also created a multi-million dollar sales and marketing campaign including a fictional character named Leroy Smith to promote these products and Jordan's entrance into the Hall of Fame.
Despite its exclusive licensing agreement with SportsFuzion, the Hall of Fame negotiated a contract granting Nike “rights to use all Basketball Hall of Fame logos and marks for Leroy Smith.” When first asked about the existence of an agreement with Nike, the Hall of Fame adamantly denied any deals or contracts. However, the Hall of Fame's attorneys recently provided SportsFuzion with a copy of its undisclosed contract with Nike and in a letter to SportsFuzion, claimed that the “Leroy Smith marketing/advertising campaign does not involve the promotion of the sale of shoes and/or other apparel in any respect” and thus “would not create any potential conflict with any rights that might be held by SportsFuzion.”
“For the Hall of Fame to claim that the Leroy Smith campaign is not about the promotion of NIKE products is simply mind-boggling. The Leroy Smith campaign was created for one purpose only — to market and sell Nike's Michael Jordan Hall of Fame Collection,” said Andrew Mirken, president and co-founder of SportsFuzion. “How can the Hall of Fame pretend that the Leroy Smith campaign is not designed to promote the sale of Nikeproducts when we've seen the Leroy Smith video commercials being played in numerous retail locations. Clearly, the Leroy Smith campaign is part of a calculated commercial plan to create advance buzz for the Nike Air Jordan Hall of Fame Collection. In fact, the contract between Nike and the Hall of Fame expressly states that NIKE will indemnify the Hall of Fame for any claims made relating to products bearing the Hall of Fame marks licensed by Nike. This clearly violates the terms of SportsFuzion's agreement with the Hall of Fame.”
“We believe that this contract between Nike and the Hall of Fame is just the tip of the iceberg, and the NBA must be really embarrassed by this whole ordeal. The next steps of this lawsuit, referred to as discovery, will yield more information about the development of the Hall of Fame Collection and about the back door negotiations that were done with the express intent of circumventing SportsFuzion's exclusive licensing deal with the Hall of Fame,” said Steve Barlow, co-founder, lead investor and SportsFuzion Board Director. “We want this product line to be hugely successful and to receive our fair share.”
