Nike, Great Protectors Of IP, Found To Be Infringing On Copyright And Refusing To Pay

Nike, Great Protectors Of IP, Found To Be Infringing On Copyright And Refusing To Pay After Software Audit

A brief review of Nike's history on matters of intellectual property will result in the impression that the company is a stalwart of IP protection. The company has been fond in the past of relying on intellectual property laws to take strong enforcement actions, even when the targets of those actions are laughably dwarfed by the company's sheer size. Like many massive athletic apparel companies, it jealously protects its trademarks and patents. And, yet, it has been found in the past to be perfectly willing to infringe on the trademark rights of others.

But those past instances are nothing compared to the full brazen display alleged by Quest in its copyright lawsuit against Nike.

The company, known for developing a variety of database software, filed a lawsuit in an Oregon federal court this week, accusing Nike of copyright infringement. Both parties have had a software license agreement in place since 2001, but during an audit last year, Qwest noticed that not all products were properly licensed.

“That audit revealed that Nike had deployed Quest Software Products far in excess of the scope allowed by the parties’ SLA,” Quest writes in their complaint, filed at a federal court in Oregon.

In addition, Quest says the audit revealed that Nike was using pirated keys and cracked versions of Quest software to route around paying for the full licensing costs it would otherwise be obligated to pay. Those types of actions aren't the sort of accidental infringement we've come to expect at large companies like Nike. Instead, they constitute a willful attempt to not pay for the software in use.

Now, should your mind already be conjuring the vision of a few employees going rogue, with upper Nike management having no idea this was going on and being perfectly willing to make all of this right... naaaaaaah.

When the software company found out, it confronted Nike with the findings. However, according to the complaint, Nike refused to purchase the additional licenses that were required for its setup. This prompted Quest to go to court instead...The company requests an injunction restraining Nike from any infringing activity and demands compensation for the damages it suffered as a result. The exact height of these damages will have to be determined at trial.

Honestly, it's hard to imagine what the executives and legal team for Nike have planned for this trial. Unless Quest's audit is simply wrong -- a possibility, but not likely -- then I'm not sure what the defense of any of this would be. Given that Quest rather kindly tried to get Nike to do right by it outside of court before filing suit, any jury sitting for this trial is likely going to notice what a bad look this is for Nike. Again, that all assumes there isn't some other explanation for all of this, but one would have expected such an explanation to be presented to Quest upon contact, and yet the lawsuit was still filed.

Regardless, this is yet another instance of a company happy to wield intellectual property upon others only to be found to be violating those rights itself. You can almost set your watch to it.

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