With suit, Under Armour protects its brand

Sunday, February 24, 2013
By Alissa Gulin
Daily Record Business Writer

Things were peaceful for a long while.

Under Armour claims its ‘I WILL’ slogan is being infringed by Nike’s new ad campaign.

Despite being direct competitors, Under Armour Inc. and Nike Inc. managed to co-exist in a highly visible apparel marketplace without stomping too hard on each other’s toes. Save for one lawsuit 10 years ago, in which Nike sued the Baltimore-based company for allegedly copying its moisture-wicking Dri-Fit clothing line — the case was dismissed in 2006 — the rivals have mostly kept their distance.

So why, several Baltimore lawyers wonder, did Nike launch an advertising campaign so closely related to its rival’s trademark?

“There are gazillions of words marketers can string together to form slogans,” said James B. Astrachan, a partner at Astrachan Gunst Thomas P.C. in Baltimore. “But, coincidentally, Nike happened to pick the same ones that its competitor was using? No — it’s pretty much intentional.”

In a suit filed Thursday in U.S. District Court in Baltimore, Under Armour alleged recent Nike advertisements use the words “I will” in a similar format and context to sell similar products as its own established ad campaign. “I Will” is a registered Under Armour trademark, and the suit claims Nike’s ads dilute the mark’s effectiveness, produce customer confusion and constitute unfair competition.

Nike is “being very, very aggressive with it,” Astrachan said. “This, to me, is blatant [trademark infringement], and it smacks of intentional. They had to know they were going to get sued. So, I wonder, why are they doing this? What’s in it for them?”

That’s a question only Nike executives can answer, and a spokeswoman said Friday the company wasn’t yet ready to comment.

Perhaps it was Under Armour’s introduction of a shoe line, which kicked into high gear in late 2010, when CEO Kevin Plank announced his intention to surpass Nike in footwear market share.

Perhaps it was Under Armour’s recent foray into direct retail, with its flagship store opening in Baltimore’s Inner Harbor.

Or perhaps it was something much simpler.

“Maybe all Nike is doing, frankly, is being like a big dog at the dog park, telling a small dog, ‘I can take your bone away whenever I want to,’” Astrachan said.

Since Under Armour appeared on the scene in 1996, industry behemoth Nike has watched it mature from new-kid-on-the-block annoyance to international powerhouse with a rapidly expanding customer base. Nike is still top dog, earning $24.1 billion last year compared to Under Armour’s $1.8 billion.

But Under Armour isn’t so small it can’t fight back, Astrachan said.

In fact, it has little choice: It must protect its brand.

“It’s sort of a clever usage, a derivation, but nevertheless it’s a usage,” E. Scott Johnson, principal at Ober|Kaler and chair of the firm’s Intellectual Property Group, said of Nike’s ad campaign. “And if you ignore it when it’s in your face like this, it’s almost like acceptance. It’s kind of a waiver of your trademark rights.”

Because Nike uses “I will” to begin longer sentences than Under Armour’s ads do, they “are not as clean and direct as an infringement where the slogan is front-and-center by itself,” Johnson said.

That might be the crux of Nike’s argument.

“I would imagine Nike is going to say that there are enough distinguishing elements to separate their use of ‘I will,’ but it looks like Under Armour has some bona fide arguments,” said Jonathan R. Wachs, a principal at Offit Kurman. “These are two direct competitors using a similar mark in a similar space.”

Under Armour has been using the slogan since 1998, and first registered the words as a trademark in 2000 for certain apparel items.

Since then, the company has demonstrated extensive use of the slogan in advertising campaigns and presumably spent a hefty sum on promoting it, several lawyers said, establishing common law rights to the trademark. It registered the trademark for additional products as recently as May, the lawsuit notes.

The federal registration, Johnson explained, enhances protection for the mark.

Astrachan said he thinks Under Armour has a strong case, but one thing stuck out in the lawsuit — or rather, he said, something was missing.

Under Armour requests a permanent injunction prohibiting Nike to use the “I will” slogan, but doesn’t ask the judge to grant a preliminary injunction, which would require Nike to stop using the slogan while the litigation proceeds.

Astrachan said based on his experience, plaintiffs don’t ask because they think they might not receive. Failure to request the preliminary injunction might indicate Under Armour is concerned Nike will present a compelling defense.

If Under Armour loses its case, the strength of the company’s trademark would be diminished and other competitors could play copycat more easily, Johnson said.

But if the company hadn’t filed suit at all, those outcomes would have been all but certain, Johnson and Astrachan agreed.

“I think it’s fair to say Nike has forced Under Armour’s hand,” Astrachan said. “Under Armour had to file this lawsuit; it couldn’t not police its mark. The next thing they know, Nike could be adopting “Protect This House.”