Thursday, April 3, 2003
Nike sweating trademark infringement
By Darren Rovell ESPN.com
The fight to capture one of the most overlooked but fastest-growing segments of the sports apparel industry is headed to court.
Nike has filed suit in U.S. District Court in Oregon against its moisture-soaking apparel competitor Under Armour primarily for using Nike's trademark "DRI-FIT" term on Web site addresses linking to Under Armour's homepage. Nike has trademarked "DRI-FIT" for use on its products three times over the past decade, the lawsuit alleges.
In the last two years, almost every major apparel company has debuted a line of micro fiber products that dry quickly. Nike has "DRI-FIT," Russell Athletic calls its "Dri-Power," Reebok uses the word "PlayDry" to explain its technology associated with its NFL Equipment line, and Adidas has "ClimaLite."
Under Armour has grown from a mom-and-pop business to a legitimate marketplace contender over the past seven years. In 1996, University of Maryland running back Kevin Plank made $17,000 selling athletic underwear out of his car. Revenues went from $25 million in 2000 to $55 million last year, and company estimates could make Under Armour a $100 million business in 2003. Nike apparel makes up an estimated $3 billion of the company's $10 billion annual revenue.
Under Armour registered Web sites containing the "DRI-FIT" name in June 2001.
"Under Armour is using the domain names to attract and divert Internet users to Under Armour's Web site for Under Armour's commercial gain," Nike alleges in the lawsuit. "On information and belief, Under Armour's use of domain names has been and continues to be made with a bad faith intent to profit from Nike's 'DRI-FIT' marks."
Officials representing Under Armour did not immediately return calls seeking comment.
Lawyers representing Nike asked for preliminary and injunctive relief of the use of the domain names, $100,000 in damages for each of the four Web sites or profits generated from the confusion, which would be treble under trademark infringement law.
While Nike pays millions to secure apparel contracts of college teams, such as all Four Final Four men's basketball teams this year, Under Armour hopes that players that play for teams that pay for their gear -- including 101 Division I-A college football teams -- give the company free advertising if they take off their pads or jerseys during a game. The company has previously used San Francisco Giants slugger Barry Bonds and Houston Texans linebacker Jamie Sharper in their advertising, which frequently appears in men's magazines.
Darren Rovell, who covers sports business for ESPN.com, can be reached at Darren.email@example.com