The impending Nike licensing deal with the NFL has hit its first speed-bump a week before the two sides enter into a five-year contract. Nike has filed suit against Reebok for unauthorized sales of Tim Tebow Jets jerseys at a variety of nation-wide sporting goods stores.
A week after Tebow was dealt to the Jets, the demand for jerseys was high and Reebok has attempted to take advantage of that small window before their license expires. Unfortunately for Reebok, they would appear to not have the right to manufacture Tim Tebow Jets jerseys. Nike is suing Reebok for violation of the Lanham Act, misappropriation of rights of publicity, tortious interference with current and prospective business relationships and unjust enrichment.
The lawsuit describes a process for manufacturing individual player jerseys that would appear to preclude Reebok from selling Tebow Jets jerseys. According to Nike:
A legitimately licensed NFL player-/NFL team-identified product requires two distinct grants of intellectual property rights: the right to use the trademarks of the NFL and/or its member clubs ... and the right to use players' names and playing numbers.
The right to use NFL Marks on licensed products is controlled by NFL Properties. The player name/number rights can be obtained in only one of two ways: a third party can obtain the right directly from the player, or they can enter into a group license with NFL Players Incorporated, which is the licensing arm of the National Football League Players Association.
Reebok retains their license with NFL Properties through March 31, 2012, but their license with NFL Players Incorporated expired on March 1, 2012. This would appear to allow Reebok to manufacture the Jets jerseys in March, but with the Tim Tebow trade going down on March 21, Tebow jerseys from Reebok would be forbidden.
Reebok could have also obtained Tim Tebow's individual permission to use his name and number. According to the lawsuit, Tebow entered into an agreement with Nike on March 24, 2010, granting them the exclusive right to use Tebow's name in connection with apparel. Furthermore, Nike claims "an authorized representative of Tebow advised Reebok that its use of Tebow's name was unauthorized and demanded that such use be immediately discontinued and demanded the immediate removal of the offending products from any and all locations."
Nike claims that Reebok is still allowed to sell Tebow's Broncos jerseys for the rest of the month that were manufactured prior to March 1, 2012. However, Nike believes Reebok is undercutting Nike's build-up to an April 3 unveiling of their new products. Accordingly, Nike requests an injunction preventing further sales of the Tebow Jets jerseys, recalling all such jerseys from retailers and ordering the destruction of any unauthorized Tebow products. Additionally, Nike demands punitive damages for Reebok's intentional actions.