Kawhi Leonard's suit against Nike over 'Klaw' logo falls into grey zone
Does company's design simply build off star's version, or is it a new design?
The lawsuit filed this week by Kawhi Leonard against sneaker giant Nike offers some insight into the notoriously private star's thinking.
It also provides a window to the high-stakes world of multi-million dollar shoe and apparel agreements.
At issue is Leonard's now-famous Klaw logo, an outline of his notoriously large hand, featuring his initials K.L. and his No. 2 drawn inside.
Leonard is asking the U.S. District Court for the Southern District of California to declare that he is the sole owner of the Klaw logo.
The Toronto Raptors superstar says he designed the logo and has the right to use it to sell whatever products he chooses.
Nike contends it not only owns the logo but created it. In fact, in May of 2017 the company applied for and was granted a copyright registration for the logo.
The lawsuit is Leonard's side of how the Klaw logo came to be. He says that he had been working on the design as far back as college, when he was a star at San Diego State.
WATCH | Leonard says lawsuit won't be a distraction:
"Since at least his college years, he has contemplated and conceived of ideas for a personal logo which would be unique to him and reflect something meaningful relating to his own image," Leonard's lawsuit contends.
The claim explains that Leonard is "known for his extremely large hands. Throughout his career spectators have noticed Leonard's large hands and they are often described as contributing to his success as a basketball player."
The logo is incredibly valuable, especially when you're talking about an NBA superstar. We're talking millions….- Mariam Richter, trademark specialist
In late 2011, after consulting with friends and family and seeking the advice of professional designers, Leonard says he settled on a final Klaw design. Around the same time, Leonard signed an endorsement deal with Nike to provide "personal services and expertise in the sport of professional basketball and endorsement of the Nike brand and use of Nike products."
According to the lawsuit, during the course of the agreement, Nike approached Leonard about "affixing a unique logo" to Leonard's Nike-branded merchandise. Nike presented Leonard with numerous modifications of his original design.
Leonard rejected all of them until the two sides agreed on a logo in June 2014. In the lawsuit, Leonard contends that he never transferred rights of the "Leonard logo" to Nike. In fact, the lawsuit says Nike continued to refer to the design as "Kawhi's logo" in numerous written communications.
In 2017, according to the lawsuit, Nike "applied for a copyright registration of his logo and falsely represented in the application that Nike was the author of the logo."
Since the filing, Nike has worked to protect its rights, communicating to Leonard and his representatives that Nike owns the logo and Leonard should "cease using the logo on non-Nike merchandise."
Plenty at stake
There is a lot at stake. In 2018, Leonard left Nike and is now under contract with New Balance. He "intends to use the Leonard logo apparel and footwear he is actively developing and intends to bring to market."
Mariam Richter is a Florida attorney who specializes in trademark and copyright law. She says that usually in cases like this, the financial opportunity for athletes to capitalize on a logo or a phrase is fleeting.
Not in this case.
"The logo is incredibly valuable, especially when you're talking about an NBA superstar. We're talking millions of revenue from this logo on merchandise."
Legally, Richter says, these cases are usually settled out of court, but if this proceeds, it will come down to one central question: "Just how much Nike changed the logo that they ultimately used from his original drawing."
In legal terms, the question is whether Nike's "Klaw" logo is transformative or derivative. In other words, does Nike's design simply build off of Leonard's or is it a new design?
"The grey zone comes in when you have to decide whether or not the new version is sufficiently transformative from the old version to be entitled to a new copyright," Richter says.
"I think it's clear that Nike's graphics people came up with it. The question is, is it transformative or derivative? It's not the original drawing that Leonard did himself."
Richter says it can often be difficult to spot subtle but important differences.
"From a trademark perspective, you'd want to know what the consumer thinks, and a consumer would look at these and say they're the same," Richter says. "From a copyright perspective, there's an expert graphic designer that might say that you know 100 hours of work went into changing it from that to that. Does that make it transformative?"
Nike won't comment
Leonard says no and wants the court to declare that he is the rightful owner and author of the logo and that Nike committed fraud by registering it in the first place.
Nike has said it doesn't comment on pending litigation.
With Leonard heading into potential free agency this summer, the fate of the Klaw looms large.
The New York Times also reported that the Los Angeles Clippers "looked into the feasibility of purchasing the portion of the rights to Leonard's 'Klaw' logo that is still owned by Nike."
The thinking is the acquisition would be part of the team's free-agent pitch to Leonard this summer.