Previously on marketinglaw we reported on Hackney Council’s accusations of trade mark infringement against Nike over its Hackney Marshes sports gear range. Now the case has been settled, but on terms humbling the sports brand.
Topic: Intellectual Property
Who: Hackney Council and Nike
When: September 2006
As was reported in May 2006 on marketinglaw.co.uk, Hackney Council was not amused when it discovered its logo (the letter 'H' surrounded by the words 'The London Borough of Hackney') was being used by Nike on a new range of t-shirts, vests, trainers and footballs to celebrate the history of Hackney Marshes. Nike used the logo (which also coincided with the 2006 World Cup) as it believed it was a symbol of all that is great about amateur football. However, the glitch in Nike's plan was that it had not sought permission to use the logo in this way from Hackney Council. Nike therefore found itself faced with the threat of litigation.
As was previously reported, Hackney Council asked Nike to withdraw all merchandise using the logo until the parties can reach a settlement. Hackney Council's view was that the way to settle this matter would be for Nike to provide financial compensation which the Council could use for the development of sport within the borough. The results of this match are now available and as reported in the press and on Hackney Council's website, Hackney Council was successful in gaining £300,000 from Nike in an out of court settlement.
The settlement was based on a licensing royalty arrangement on sales of the sports range concerned. It is also reported that Nike issued an apology to Hackney Council and agreed to pay all the Council's legal costs as part of the agreement. Mayor Pipe of Hackney Council has been quoted as saying that the Council's legal team advised it that this was a fair settlement based on the volume of goods actually sold by Nike and he felt the outcome of this dispute supported the principle that just because the Council is a public organisation, does not mean that big corporations can take advantage and use its assets without asking first. Furthermore, those involved with this matter say that many public organisations do not see the need to trade mark their logos or establish copyright in their materials but this case should act to illustrate to such organisations that it is worthwhile for the public sector to ensure its intellectual property rights are protected.
Why this matters:
Hackney Council had not registered its logo as a registered trade mark before this matter arose but even so, it did have the potential options of relying on false endorsement (if it could have proven that it had a significant reputation and goodwill and that Nike's action of creating sportswear featuring its logo has produced a false message resulting in Nike's market believing the sportswear is endorsed, recommended or approved of by the Council) and/or copyright (assuming that the Council is the legal owner of any artistic copyright vesting in the logo design). For those of us who are lawyers, it is a shame the matter did not reach the courts to see what the Council's success would have had it relied on these arguments….
The word from the Nike camp following the settlement agreement is that Nike "…inadvertently used imagery that included the council's logo" and that this "…was done in good faith and not as a deliberate act". This dispute acts as a good reminder to all marketers and manufacturers, not just to Nike, that they must always stop and think when they want to make any use of images or logos used by a third party. Just because a logo has not been registered as a trade mark does not mean you can use it as you please. Trade marks are just one of many rights that must be considered when clearing a marketing campaign and associated merchandise.