Nike and Reebok recently settled a lawsuit Nike brought against its chief rival in a bid to prevent it from selling New York Jets clothing bearing the name of Tim Tebow, the Jets’ new utility player and backup quarterback. The lawsuit came less than a week after the Denver Broncos traded Tebow to the Jets. Once the trade was announced, Tebow fans lined up to buy Jets jerseys and t-shirts bearing Tebow’s name. This apparel was manufactured by Reebok.
Nike alleged in its lawsuit that Reebok did not have an agreement in place to sell Tebow-related Jets products and that Reebok’s merchandising license with the NFL Players Union expired on February 28, 2012. Another agreement, which allowed Reebok to market NFL jerseys, lapsed on March 31, 2012. Reebok argued that according to its licensing agreement with the Players Union, it was allowed to use the names and numbers of players who were changing teams in March, including Tebow’s.
The U.S. District Court for the Southern District of New York, where the suit was brought, had originally granted Nike a temporary restraining order against Reebok, blocking Reebok from selling Tebow Jets-apparel. The judge later converted the restraining order into a temporary injunction, concluding that money damages would not make Nike whole and that equitable relief was necessary.
Reebok claimed to have made 6000 jerseys and 25000 t-shirts with Tebow’s name and number on them. This apparel also bore the logos of the New York Jets and the National Football League. Before Tebow was traded from the Broncos, his Broncos jersey was one of the best-selling jerseys in the NFL. Not surprisingly, according to at least one poll, Tebow is currently the most popular athlete.
Reebok had originally planned to print Tebow’s name and number on blank Jets apparel and sell them pursuant to a clause in its agreements allowing it to continue marketing the clothing for a limited period of time.
Nike did not dispute that Reebok maintained the right to continue selling existing Broncos jerseys with Tebow’s name and number.
On April 1, 2012 Nike entered into an exclusive contract to sell apparel for all of the NFL teams. This apparel is scheduled to be available in late April. According to the Southern District Court judge, Tebow/Jets fans will just have to wait a little bit longer to get their hands on his new Jets jersey.
According to the terms of the settlement reached by Nike and Reebok, Reebok will take all of its Jets apparel bearing Tebow’s name off the market, and it will repurchase Tebow/Jets apparel that was already shipped to retailers. Reebok further agreed not to manufacture or market such merchandise.