What it do baby? Kawhi seeks to trademark catch phrase

What it do baby.  A call-out made famous by then Toronto Raptors Kawhi Leonard as he sat in the back of a car with teammate Serge Ibaka.  Leonard is seeking to trademark the catchphrase to sell merchandise.

Leonard, known for his laconic, deadpan delivery became an ascending NBA star this past year as he helped the Toronto Raptors with the NBA title.  He then moved back to his hometown of Los Angeles to play with the Los Angeles Clippers.

New Balance, his apparel sponsor, capitalized on his personality with a simple, straightforward marketing campaign.  New Balance released “Board Man Gets Paper” and “Fun Guy” in bold type on black t-shirts sold out once they were released.  Leonard’s game and popularity grew and New Balanced took advantaged of the timing.

While this was happening, Leonard is embroiled in a lawsuit with his former sponsor, Nike, over a logo he states he created but Nike copyrighted and now states is owned by the brand, not Kawhi.  Leonard initiated the lawsuit, but Nike has filed counterclaims which include a breach of contract.  The lawsuit is still pending.

The latest trademark application is filed by Leonard’s LLC to ensure no dispute with New Balance.

Kawhi Leonard sues Nike over “Klaw” logo

Kawhi Leonard has filed a lawsuit against Nike for the use of his “Klaw” logo.  The Toronto Raptor’s forward argues that the company ‘falsely claimed’ that it created the logo in a copyright registration.

Leonard, who is now a New Balance-sponsored athlete, claims that he came up with the “Klaw” logo and gave Nike permission to use the logo when he was a Nike-sponsored athlete.  The copyright registration filed by Nike was done without his consent according to the Leonard’s lawsuit which was filed in California federal court.

In the lawsuit, Leonard alleges that he had contemplated the logo since college and created a drawing of a logo in December 2011/January 2012.  Leonard signed a “Men’s Pro Basketball Contract” with Nike in October 2011.

Nike approached Leonard about a personal logo.  While the Beaverton, Oregon-based company provided proposals, Leonard claims to have rejected them.  While Leonard agreed upon a logo, he claims that he retained ownership of that logo.  In May 2017, Nike registered with the U.S. Copyright Office, the logo accepted by Leonard.

Leonard applied for a trademark based on his logo in November 2017.  Now a New Balance athlete, intends to use the “Klaw” logo on sportswear but Nike claims that it owns the mark and has registered the Copyright.

Leonard is seeking a Declaratory Judgment from the Court which would state that Leonard is the true owner of the logo.

This case involves the intersection of Copyright law and Trademark law.  Copyrights are original creative works while Trademarks are recognizable signs, designs or expressions for a good or service.  A logo, like the one fought over here, can be both a copyright and trademark.  While distinguishable, Leonard claims he created the logo that he used with Nike.  It can also be used for a trademark as Leonard intends to use the mark on branded clothing.

The case is notable since there did not seem to be a contract regarding who owns the rights to intellectual property used while marketing Leonard.  This seems that it would have outlined ownership rights of things like this.  Nike claims that it owns the copyright and will likely argue that it assisted Leoanrd with the logo and thus retained ownership since he was under contract at the time.

Obviously, with Leonard’s great run with the Raptors this year, he is looking to capitalize with his new company, New Balance.   Also, the Los Angeles Clippers, which hopes to land Leonard after this season, hoped to buy the logo from Nike.

The lawsuit shows the need for contracts to be detailed enough to contemplate things like intellectual property rights.  It also shows the intersection of copyright and trademark law and its uses.

Washington state a long way from gambling regulation

Will Washington State have legal sports betting?  We’re probably years away from that happening despite the fact that other states across the nation have been proactive in drafting legislation to legalize gambling in their state.

Last year, the United States Supreme Court struck down the federal law that banned sports gambling in all but a handful of states.  The U.S. Supreme Court left it to the individual states to decide whether or not they allowed gambling.  Currently, there are 8 states that have passed laws to allow legal betting in pro and college sports.

In the 2019 legislation session, Olympia had three bills on gambling on pro and college sports.  But none of those bills came close to passage.

HB 1975, as outlined by the Tacoma News Tribune, was the most notable as it would have allowed Vegas-style gambling only at tribal casinos.  As you might expect, there was opposition by trade groups representing card rooms, sports bars and restaurants.

This doesn’t even consider the possibility of mobile sports betting.  HB 1975 would have allowed bets to occur over one’s phone only if the individual is in a tribal casino.  But first, the stakeholders must decide on a platform.

HB 1975 received the most attention because of the strong backing by the tribal casinos.  But this was offset by other potential venues for gambling including the Emerald Downs racetrack in Auburn, Washington.  Emerald Downs, which also houses a casino on its premises, voted against the measure despite the fact the track is run by the Muckleshoot Indian Tribe.

Since this is a new issue for lawmakers to grasp, there are a lot of questions and concerns.  One of the major issues is the possibility of the rise of gambling addiction.  In addition, the economic impact of regulating sports gambling is an interesting proposition for the state which is always is always looking for ways to generate revenue.  According to the American Gaming Association, there is an estimated $58 billion bet on the NFL and college football each year.  But, most of that is illegal.  If the state can realize on a fraction of the amount of money through regulated sports betting, it would certainly be a boon.  HB 1975 which would allow sports betting on tribal lands would mean that state and local governments would not receive tax revenue but only through a trickle-down affect from consumer spending.

If, or maybe when, sports betting is legalized in the state, one would have to think that the Washington State Gambling Commission would be a part of overseeing regulation.

Other states including Montana and Oregon have moved forward in legalizing sports gambling.

Esports gets its first big contract lawsuit

Esports has its first big contractual lawsuit as Turner Tenney, also known as “Tfue” sued Faze Clan Inc. (“Faze Clan”) earlier this month in the Superior Court of the State of California.  The lawsuit underscores an issue in the nascent sport.

The Complaint states that Tfue is a 21 year old professional gamer and content creator/streamer.  His videos are viewed by millions, sponsors are willing to pay for Tfue to perform in and create videos that will, at least in part, promote their goods, services and brands.

Gaze Clan is an esports entertainment company according to Tfue.  He signed a “Gamer Agreement” with Faze Clan when he was 20 and describes the contract as “grossly oppressive, onerous and one-sided.  Notably, Tfue underscores that Faze Clan was to receive up to 80% of the revenue paid by third-parties for his services.

Tfue also claims that they violate California’s Talent Agency Act as he claims that it protects artists and Faze Clan is an unlicensed talent agency operating within the state.

In addition to the alleged illegal contract and illegal procurement of employment, Tfue claims that it has diverted money owed to him for themselves.

Tfue claims that the Gamer Agreement had an initial term of six months and would automatically be extended for an additional thirty-six months if certain conditions were met.  As part of the lawsuit, he is requesting termination of his Gamer Agreement.

Despite letters from his attorney regarding a breach of the Gamer Agreement, Faze Clan, denied that it had breached the agreement.

In addition, Tfue claimed certain sections of the contract were in violation of state law including an exclusive “Matching Right” section

He also claims that Faze Clan passed up on a sponsorship deal for him due to a conflict the company had with one of its competitors.

This lawsuit is unique in esports as there has been few, if any, contractual disputes that have gone this far.  FazeClan claimed that it would release the full contract so that the public can see the terms.  This seems like a very good PR move but bad litigation strategy.

Faze Clan recently released this video which responds to allegations in the lawsuit and give some context to the situation.  In it, they state that Tfue had previously signed a Gamer Agreement with another organization and had attorney to look over his contract.  Moreover, they believe that he was set on starting his own organization and was looking for a way out.

This will certainly a lawsuit to watch.  Esports is evolving and contractual disputes are bound to occur as players become more savvy about what they are signing.

“Skins” lawsuit filed by owners of Tribal Casino go after Valve

A “skins gambling” lawsuit was filed in Washington State last month by a Native American Tribe that owns the Quinault Beach Resort and Casino citing that Valve’s CS:GO use of skins is illegal gambling. The Quinault Nation argues that Valve’s video game, Counter Strike: Global Offensive, did not have a license to operate, facilitate or otherwise engage in any form of gambling. The lawsuit was filed in Grays Harbor County, Washington.

Quinault Nation is a federally recognized sovereign Indian Nation consisting of Quinault and Queets tribes and descendants of five other coastal tribes. It owns and operates and Indian gaming casino licensed by Washington state and regulated by the Washington Gaming Commission.

Valve is a Bellevue-based video game and online content platform company. “Skins,” as defined by the lawsuit are primary currency used “by illegal, unregulated, and unlicensed online gambling website.” They are “add-ons” to enhance the video game experience. They can be bigger guns, different outfits and more. These “skins” must be purchased with money and are not included as part of buying the video game.

According to the lawsuit, Valve was complicit with the “skins” economy as it offered a “key” for $2.50 to access virtual items that were worth much more than the value of the token. It also “allowed gambling websites to use Valve accounts on Valve’s servers and Valve’s computers to effectuate gambling transactions.”

Below is an example that was embedded in the lawsuit.

The Quinault Nation is requesting a court order requiring Valve to stop offering crate opening online slot machine gaming until a time in which the Washington Gaming Commission can examine it to determine if it requires a license.

The lawsuit builds on previous litigation which included an attempt to bring a class-action lawsuit against Valve but those lawsuits were sent to arbitration as individual cases pursuant to a class action wavier and arbitration clause in Valve’s Subscriber Agreement.

Here, The Quinault Nation has an interest in Valve’s alleged “skins” gaming as they believe it takes away from its own legal and licensed gambling enterprise. They believe that Valve is engaging in unfair competition with the legally licensed, regulated gambling. Notably, it explains that this is due to neither Valve or internet gambling sites using Valve’s virtual items having to abide by gaming laws and regulations, and consumers and the plaintiffs being harmed as a result. It cites a consumer protection component as well since there are scammers out there that are not regulated that may sell fraudulent items on web sites.

University of Washington announces launch of new esports arena on campus

The University of Washington is the latest college to cater to the burgeoning esports industry.  It was announced on Tuesday that the University of Washington would furnish its student activities building with a space for esports events.

It will make the UW the largest public, higher education institution in the nation and the first university in the state of Washington to have a dedicated esports arena.

The 1,000 square foot gaming center is set to open this spring and will be the center for casual and competitive gaming and virtual reality.  A portion of the UW’s Student Technology Fee will fund this arena.

The arena will bring together a community of gamers as well as an opportunity for research in game development and tools for expanding broadcast opportunities according to former Washington Gaming Association President Kevin Zhou and UW alum.

With the expansion of the sport, esports scholarships are being offered by universities as the industry is growing at a rapid rate.

Students will be $3.50 an hour or $30 for 10 hours; UW faculty and staff will pay $4.50 per hour or $40 for $10 hours.  The general public will pay $6 an hour.

The move shows the growing interest in video gaming (i.e., esports).  More than just a hobby, like the bowling alley that used to be in the basement of the HUB, esports is now offering more.  The arena will offer top of the line gaming equipment as well as virtual reality.  It should be a real interesting place to go if this is your interest.