A federal judge from the Northern District of Illinois has granted summary judgment to sporting goods manufacturer Nike on several unfair competition claims brought by a maker of “padded compression shorts,” which athletes wear to prevent injuries.
Among the reasons for the court’s ruling was that Nike did not purposely try to deceive the consumer in “commercial advertising or promotion.”
As background, the court noted that plaintiffs McDavid Knee Guard and Stirling Mouldings Limited manufacture the shorts.
Nike has exclusive supplier agreements with several colleges and universities, whereby it is the exclusive supplier of athletic competition apparel for those schools. On or around October 2008, “Nike informed personnel connected with teams at certain universities that have agreements with Nike that the team members were not allowed to use McDavid foam padded girdles under the terms of their agreements with Nike.”
Based on the statements made to colleges and universities, McDavid sued Nike under the Lanham Act, 15 U.S.C. § 1125 (Count V), the Illinois Consumer Fraud Act, 815 ILCS 505/1 et seq. (Count II), and the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count III), in addition to asserting a claim for tortious interference with prospective business advantage under Illinois law (Count IV). (Dkt. No. 56, Ex. 1; see also Pls.’ Local R. 56.1(b)(3) Resp. PP 31, 33.) Nike moved for summary judgment on each of the claims.
Deciding the Lanham Act claim first, the court found that “Nike’s personal communications to the colleges and universities with which Nike already had an existing exclusive supplier agreement are analogous to letters to consumers or person-to-person communications which the Seventh Circuit has already deemed insufficient to prove false or deceptive advertising under the Lanham Act. Consequently, Nike is also entitled to summary judgment on McDavid’s Lanham Act claim because McDavid has failed to prove that the accused statements occurred in ‘commercial advertising or promotion.’”
Similarly, noted the court, the claims under the Illinois Consumer Fraud Act and Illinois Uniform Deceptive Trade Practices Act also require a showing that the defendant made a false statement of fact in a commercial advertisement. “Because McDavid cannot prove that the identified statements are false statements of fact under the Lanham Act, the court found that Nike is entitled to summary judgment on [Counts II and III],” noted the court.
“Lastly, Nike has moved for summary judgment on McDavid’s claim for tortious interference with a prospective business advantage under Illinois law, arguing that McDavid cannot prevail on that claim because the challenged statements to the colleges and universities were true. Under Illinois law, the elements of a claim for tortious interference with a prospective business advantage are
“(1) the plaintiff’s reasonable expectation of entering into a valid business relationship; (2) the defendant’s knowledge of the plaintiff’s expectancy; (3) purposeful or intentional interference by the defendant that prevents the plaintiff’s legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from the interference. Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376, 398 (7th Cir. 2003) (citing Soderlund Bros., Inc. v. Carrier Corp., 278 Ill. App. 3d 606, 663 N.E.2d 1, 7-8, 215 Ill. Dec. 251 (Ill. App. Ct. 1995)). However, a defendant who ‘has not employed a wrongful means or is not motivated solely by malice or ill will’ but ‘merely gives truthful information to another,’ is not liable for tortious interference with a prospective business advantage under Illinois common law. Id. at 399 (citing Soderlund Bros., 663 N.E.2d at 10). Here, based on the court’s above finding that Nike’s representations were not false statements of fact but rather opinions of contract interpretation, McDavid’s tortious interference with a prospective business advantage claim similarly fails.”
McDavid Knee Guard, INC., and Stirling Mouldings Limited v. NIKE USA, INC.; N.D. Ill.; 08 CV 6584, 2010 U.S. Dist. LEXIS 76002; 7/28/10
Attorneys of Record: (for McDavid Knee Guard, Inc., an Illinois corporation, Stirling Mouldings Limited, an English corporation, Plaintiffs, Counter Defendants: Karl Regan Fink, LEAD ATTORNEY, John F. Flannery, Paul Bernard Henkelmann, Fitch, Even, Tabin & Flannery, Chicago, IL.
For Nike USA, Inc., an Oregon corporation, Defendant, Counter Claimant: Alyson G Barker, Russell Burke Hill, William C. Rooklidge, PRO HAC VICE, HOWREY LLP, Irvine, CA; Steven Yovits, Howrey LLP (CH), Chicago, IL.
