As many of you are aware, the sports world recently has focused a significant amount of attention on the inherent dangers of playing football and other competitive sports, at both the professional and amateur levels. At the same time, the federal courts have been wrestling with an intellectual property dispute between Nike and specialty sports equipment designer and manufacturer, Stirling Mouldings Limited and McDavid Knee Guard, Inc., regarding padding designed to protect players from injury.
In an action filed in the Northern District of Illinois, Stirling and McDavid charged Nike with patent infringement and violation of federal and state unfair competition laws in connection with the manufacture, distribution and sale of protective gear used in high-contact sports. The plaintiffs alleged that, in 2004, they had introduced a significant advance in protective gear technology under the “HexPad” trademark, to sports teams at various levels of competition. The HexPad products used individual, geometrically-shaped compression pads that were attached directly to a garment to provide both lightweight and flexible protection and, at least according to the plaintiffs, a better playing experience for athletes. While the main product initially was a pair of compression shorts worn under uniforms, primarily in basketball and soccer, the HexPad and related technologies rapidly expanded to arm and shin guards, as well as shirts integrating both chest and back pads.
According to their amended complaint, the plaintiffs built the market for their HexPad products without major competitors until Nike blitzed them in early 2009 with its release of Nike’s “Pro Combat” line of protective equipment at the NBA All-Star game. In addition to allegations of patent infringement, the plaintiffs contended that, in bringing the Pro Combat products to market, Nike had acted in an anti-competitive manner by convincing colleges and universities to sign exclusive supply agreements. In their motion preliminary relief, McDavid and Stirling cast themselves as the underdog to the Nike marketing juggernaut and alleged that Nike’s infringement of their intellectual property threatened immediate and irreparable harm to their business.
All the padding in the world could not cushion the blow to the plaintiffs when the district court denied their request for a preliminary injunction. Although plaintiffs had argued that Nike infringed its patents through both of its manufacturing processes, the district court ruled that the evidence presented by the plaintiffs regarding both Nike’s initial and current methods for manufacturing its “Pro Combat” products failed to satisfy plaintiffs’ burden of demonstrating likelihood of success on the merits. In making its ruling, the court found that it was apparent that there were any number of alternate methods to manufacture virtually the same products. The district court also concluded that the plaintiffs had not offered any credible evidence that their sales had suffered by virtue of Nike’s entry into the market or that, to the extent that sales suffered in a future date, damages after successful prosecution of their case would not provide an adequate remedy. Last fall, the Federal Circuit summarily affirmed the district court’s ruling denying any preliminary relief.
The second body blow to McDavid’s and Stirling’s claims came in July 2010, when the district court dismissed their non-patent unfair competition claims. With regard to the false advertising claims, the court held that the plaintiffs’ concession that there was ambiguity as to the “exclusive” nature of Nike’s supplier agreements had the effect of rendering those documents statements of opinion, not a false statement of fact, leaving plaintiffs unable to establish an element of their Lanham Act and Illinois Consumer Fraud Act claims. The court also held that the communications between Nike and the schools were not “commercial advertising or promotion” as that phrase had been interpreted by both the federal and Illinois courts. Finally, the court found that Nike had only made truthful statements that were non-actionable and granted Nike summary judgment on the plaintiffs’ tortious interference claims.
Perhaps emboldened by its Federal Circuit victory and the dismissal of the non-patent claims, Nike executed the next step in its game plan and filed a motion seeking summary judgment on the remaining patent claims on November 8, 2010. As of this writing, Nike’s motion is still pending and, though battered by Nike in the courts thus far, plaintiffs may still be hoping that the protective padding in their products shield them from the final blow