Recently the lawsuit commenced by Kawhi Leonard against Nike and Nike's response has attracted significant attention. The dispute also involves some interesting and recurring copyright issues.
The Facts
In substance, Leonard alleges that he is the owner of the copyright in a stylized claw logo he conceptualized and created in college. The reference to the claw relates to Leonard's large hands he uses to his advantage on the basketball court. The logo is personal to Leonard since it outlines his hand and incorporates his initials and jersey number.
After Leonard entered into an endorsement contract with Nike, using the logo in conjunction with the Nike contract was discussed. A slightly different version of the logo was used under the contract, but Leonard claims the version incorporates his initial design.
The contract with Nike expired and Leonard entered into a new lucrative endorsement deal, with a competitor of Nike. Shortly thereafter a dispute arose since Leonard continued to use the claw logo in conjunction with the new endorsement deal and Nike threatened to sue him for copyright infringement.
Nike agrees that Leonard provided a rough draft of the logo to it but says its designers created a different logo. They also raise contractual issues arising under the endorsement contract.
While US copyright law is directed at dealing with the same issues as Canadian law there are substantial differences between it and Canadian law. Our comments about Canadian law applicable to this dispute follow.
The Canadian Position
The primary issue relates to who is the author of the copyrights in issue. The author is the first owner of copyright and is entitled to exercise the rights associated with the copyright. The author of the work is the person who writes draws or composes it. Sometimes it is difficult to determine who an author is. In such cases, it is necessary to determine who exercised the skill and judgement which resulted in the expression of the work in material form.
There are several possible outcomes but two seem the most likely. The first scenario is illustrated by a previous Canadian case. In this case, an employee of the corporation created pencil sketches of designs consisting of four stars for advertising material. The sketches were given to a representative of a company specializing in making signs with a request they create advertising material following the sketches using specified lettering and colours. In a subsequent dispute over ownership of the copyright in the advertising material it was found that the company exercised no skill and judgement but merely did the mechanical work of putting the material in a form that allowed its customer to review it from a proper perspective. The author of the original sketches was the owner of the copyright in the advertising material.
If this approach were to be adopted Leonard would own the copyright in the logo used under the contract with Nike. But Nike would have an express or implied right to use this logo while the contract was in place but presumably not after its termination.
A second possible scenario is that copyright subsists in both Leonard's rough draft and the logo created by Nike. To reach this conclusion a court would have to find that Leonard exercised skill and judgement when he created the initial design and that separate and distinct skill and judgement was exercised by Nike's employees in creating the form of logo used under the contract. In this case, it would be also open to a court to find that the final form of the logo was derived from Leonard's initial work. However, the right to make a derivative work would normally belong to Leonard and Nike would presumably require his consent to allow them to use the derivative work after the expiration of the contract.
The resolution of this dispute will turn on factual issues relating to who exercised skill and judgement in creating the respective works, the nature of Leonard's derivative rights and the resolution of the contractual issues arising under the endorsement contract.
Comment
The claw logo appears to be important to Leonard, who as indicated continues to use it under his latest endorsement deal. It seems odd that the original contract with Nike did not clearly deal with the issues that now have to be dealt with. If attention had been given to the ownership and use of the logo, the dispute and subsequent litigation may have been avoided.
This article was originally published by The Lawyer's Daily (www.thelawyersdaily.ca) part of LexisNexis Canada Inc.
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