Adidas America v. Nat. Collegiate Athletic Ass'n
| Citation | 40 F.Supp.2d 1275 |
| Decision Date | 26 March 1999 |
| Docket Number | No. Civ.A. 98-2510-GTV.,Civ.A. 98-2510-GTV. |
| Parties | ADIDAS AMERICA, INC., Plaintiff, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Defendant. |
| Court | U.S. District Court — District of Kansas |
Bruce Keplinger, Timothy S. Davidson, Norris and Keplinger, L.L.C., Overland Park, KS, Tracy M. Preston, Eric S Walters, Jackson, Tufts, Cole & Black, L.L.P., San Jose, CA, Susheela Jayapal, David M Howitt, adidas America, Inc., Beaverton, OR, David T. Alexander, Jesse W Markham, Jr, Jackson, Tufts, Cole & Black, L.L.P., San Francisco, CA, for Adidas America Inc., plaintiff.
Heather Suzanne Woodson, Stinson, Mag & Fizzell, P.C., Leawood, KS, Michael J. Davis, David E. Everson, Jr., Thomas P. Schult, Stinson, Mag & Fizzell, P.C., Kansas City, MO, Gregory L Curtner, Miller, Canfield, Paddock & Stone, P.C., Ann Arbor, MI, for National Collegiate Athletic Association, defendant.
This case is before the court on plaintiff Adidas America, Inc.'s ("Adidas") motion for a preliminary injunction. Adidas has filed this action for damages and injunctive relief against defendant National Collegiate Athletic Association ("NCAA") alleging violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and state law claims of tortious interference with contractual relations, tortious interference with prospective economic advantage, breach of contract, and violations of public policy and NCAA bylaws and rules. Adidas seeks to enjoin the NCAA from enforcing NCAA Bylaw 12.5.5 against it until a trial on the merits. Bylaw 12.5.5 limits the size of advertising logos permitted to appear on student-athletes' uniforms and apparel during NCAA competitions. For the reasons set forth in this memorandum and order, Adidas' motion for a preliminary injunction (Doc. 3) is denied.
From February 1 to February 12, 1999, the court conducted an evidentiary hearing on Adidas' motion for a preliminary injunction. At the request of the parties, no closing arguments were heard by the court. On February 23, 1999, the parties submitted their findings of facts, conclusions of law, and post-hearing memoranda. The parties responded to the opposing party's submissions on March 2, 1999. After considering the testimony of witnesses, the exhibits, and the briefing submitted by the parties, the court makes the following findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).
The NCAA is a voluntary, unincorporated association of approximately 1,100 four-year colleges and universities, conferences, affiliated associations and other educational institutions. Adidas America, Inc. ("Adidas") is one of the United States' leading manufacturers of athletic footwear and apparel. Formed in 1992, Adidas is a subsidiary of Adidas-Salomon AG, a German company, which is the second largest sporting goods company in the world. Adidas currently contracts with NCAA member institutions and their coaches to advertise and promote its products.
In 1977, the NCAA had no specific rule addressing a student-athletes' wearing of apparel or use of equipment that bore a manufacturer's logo or trademark. However, the NCAA Constitution prohibited student-athletes from promoting commercial enterprises. In 1978, a member institution questioned whether the wearing of a uniform bearing a manufacturer's logo constituted the promotion of a commercial product. In response to this inquiry, the NCAA concluded that as long as the logo on the uniform was the same logo generally available on that product to the public, it would not be considered promotion of a commercial product. This rule applied to equipment as well as apparel.
The rule governing the use of logos on apparel changed in 1983. The precipitating event involved Patrick Ewing, a basketball player at Georgetown University. During a college basketball game, Ewing wore a Nike T-shirt under his uniform that bore Nike's logo on each shoulder. When the Ewing incident came to the attention of the NCAA Eligibility Committee, which is made up of representatives of member institutions, the committee reviewed the logo question to develop a new standard. In its 1984-85 Manual, the NCAA changed its existing logo rule and included a case study, known as Case No. 40, to explain the new rule's restrictions governing the size and number of logos that could be worn by collegiate athletes in NCAA competition.
The new rule continued to allow student-athletes to wear or use equipment that bore a manufacturer's normal logo, but it restricted the size and number of logos permitted on apparel worn by student-athletes. Specifically, a student-athlete's uniform could bear only a single manufacturer's logo not to exceed one and one-half inches in height or width. The new rule treated equipment and apparel differently because the Eligibility Committee, in creating the rule, was responding to the concerns created by the Ewing incident, which involved apparel and not equipment. Although this rule was framed as a case study, it had the force and effect of an NCAA bylaw. The case study was eventually codified as NCAA Bylaw 12.5.4.
In 1989, Bylaw 12.5.4 was amended to allow student-athletes to wear competition-identification materials such as football bowl-game patches that include the name of the event's sole corporate sponsor. The NCAA allowed the wearing of bowl-game patches even though they represented a second commercial logo on the uniform and routinely exceeded Bylaw 12.5.4's size restrictions.
In 1993, the NCAA formed the Special Committee to Review the Relationship of Apparel Manufacturers to the Intercollegiate Athletics Community (the "Special Committee"). When an issue arose over the application of Bylaw 12.5.4 to design elements on collegiate uniforms, the issue was sent to the Special Committee for its consideration. A design element is simply an aspect of the overall design of a piece of apparel. Design elements are relevant to this case because sports apparel manufacturers have attempted to circumvent the restrictions of Bylaw 12.5.4 by adding additional advertising on athletic apparel in the form of design elements that look similar to their logos or trademarks.
NCAA staff asked the Special Committee to determine whether the design element issue should be handled as an interpretation of the existing bylaw or as new legislation. The Special Committee decided that the issue should be addressed through an interpretation designed to confirm the original intent of Bylaw 12.5.4. In April 1994, the NCAA Council adopted the following interpretation of Bylaw 12.5.4:
Design Elements Considered as Additional Logo: The Special Committee ... recommends that the Council confirm that an institution's official uniform cannot bear a design element similar to the manufacturer's logo (e.g., Adidas soccer shirt bearing three descending stripes on the shirt's shoulder, Umbro soccer shirt with the Umbro diamond repeated around the rib knit collar) that is in addition to another logo or that is contrary to the size restriction of Bylaw 12.5.4-(b). It was VOTED "That the Council approve the committee's recommendation."
Bylaw 12.5.4 eventually became Bylaw 12.5.5.
After Bylaw 12.5.5 became the governing standard, the NCAA changed the parameters of the bylaw's size limitation. Finding no reason to limit a logo to a square shape, the NCAA changed the by-law to allow logos to be any four-sided figure with an area not to exceed two and one-quarter square inches. In its current form, Bylaw 12.5.5 provides:
A student-athlete may use athletics equipment or wear athletics apparel that bears the trademark or logo of an athletics equipment or apparel manufacturer or distributor in athletics competition and pre- and postgame activities (e.g., celebrations on the court, pre- or post-game press conferences), provided the following criteria are met. [Violations of this bylaw shall be considered institutional violations ...; however, they shall not affect the student-athlete's eligibility]:
(a) Athletics equipment (e.g., shoes, helmets, baseball bats and gloves, batting or golf gloves, hockey and lacrosse sticks, goggles and skis) shall bear only the manufacturer's normal label or trademark, as it is used on all such items for sale to the general public, and
(b) The student-athlete's institution's official uniform (including numbered racing bibs and warmups) and all other items of apparel (e.g., socks, head bands, T-shirts, wrist bands, visors or hats, swim caps and towels) shall bear only a single manufacturer's or distributor's normal label or trademark (regardless of the visibility of the label or trademark), not to exceed 2 ¼ square inches in area (i.e., rectangle, square, parallelogram) including any additional material (e.g., patch) surrounding the normal trademark or logo.
Effective August 1999, Division I off-field personnel attending NCAA championships will also be subject to the provisions of Bylaw 12.5.5. Off-field personnel include coaches, trainers, managers, cheer-leaders, band members, dance team members, and mascots. The new sideline rule includes a provision allowing existing contracts between institutions and manufacturers that include logo specifications to be honored, provided they were in effect prior to August 11, 1998.
If a member institution is unsure about whether a uniform or piece of apparel complies with Bylaw 12.5.5, it may submit the garment to the NCAA's Member Services Group for review. When a garment clearly violates the bylaw, a single Membership Services representative may rule that it is not in compliance. In other situations, the determination of whether a submitted garment complies with the bylaw is made by a small informal group of Membership Services representatives or by the entire Membership Services staff at a formal meeting. If a...
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