The Pac-12 conference schools are suing Prep Sportswear and Vintage Brand, claiming they sold branded college apparel and merchandise without authorization, damaging the schools’ reputations and costing them billions of dollars in income.
The schools argue the Seattle-based merchants have ignored the licensing policies that prohibit selling unlicensed t-shirts, sweatshirts, hats, accessories and more on their own websites that are virtually identical to the universities’ licensed products. The official complaint was filed in April by USC, Arizona State, UC Berkeley, UCLA, Oregon State, Stanford, Washington State, and the universities of Arizona, Utah, Washington, Colorado and Oregon.
By selling unlicensed products, the companies are diverting money made from the sale of official college merchandise that goes toward funding these universities, 10 of which are public, state-funded institutions, the Pac-12 lawsuit states. In addition, the lawsuit claimed that the defendants’ “infringement diminishes the value of Plaintiffs’ branding, goodwill, and business reputation.”
Branded college apparel and merchandise make up a multi-billion dollar industry that is centered around laws of licensing in order to ensure the universities’ receive revenue, the schools argue. Seven criminal counts are listed in the lawsuit including infringement on trademarks, trademark counterfeiting and deceptive practices.
James Ellis, a professor of marketing at USC and one-time dean of USC Marshall and former CEO of Porsche Design, explained how companies frequently try to skirt around licenses.
“The reason they don’t like the license is because the universities in particular charge a lot of money and they want to avoid paying a licensing fee. So what they’ll try and do — and manufacturers are pretty good at trying to do this — is they’ll try and do something that looks as close as they can to the trademark logo,” Ellis said in an interview.
This practice can be seen in realms beyond college merchandising, such as the creation of knockoff bags based on designer brands such as Louis Vuitton and Gucci, said Ellis.
Through bases of loyal fans and alumni, all of these universities have well-developed trademarks, symbols and color schemes, many of which are federally trademarked.
The universities are also arguing that the Pac-12′s intense media exposure and popularity, including their 529 NCAA championship wins, their own Pac-12 television network and media deals with ESPN and FOX contribute to the worth of their brands and the rights to their trademarks.
According to the complaint, both companies have sold and distributed products to customers and maintain websites with over 2,400 products that feature names, color schemes and logos of universities in the Pac-12.
The two companies selling unlicensed merchandise through their e-commerce sites are closely related businesses believed to be managed by one owner, Chad Hartvigson, and are operating out of the same office location in Seattle.
As alleged in the complaint, Prep Sportswear fulfills orders on a print-on-demand model, meaning it doesn’t keep stock but makes items when ordered. The website sells merchandise for thousands of colleges, including the Pac-12 schools. The website was featured on several lists of the fastest-growing private U.S. companies from 2009-2013 and has received numerous other awards for being a top-growing retailer over the years.
Vintage Brand sells an assortment of college-branded apparel and accessories. While it claims to sell vintage designs, patterns are ultimately designed by Vintage. Vintage sent several boxes of insulated drink holders bearing USC’s marks and marketing materials to USC as giveaways for fans at the football games, according to the lawsuit filed by the Perkins Coie law firm.
The Pac-12 universities claim that the similarity of the logos and merchandise produced by these two websites are confusingly similar and stand to threaten the good reputation of the Pac-12 and their branding while being directly competitive with the universities’ trademarked merchandise.
“The Infringing Marks so closely resemble Plaintiffs’ Marks that, when used in connection with Defendants’ goods, they are highly likely to cause confusion, mistake or deception of the relevant trade and public. Consumers will likely believe that Defendants’ goods are in some way associated with or connected with, or approved, sponsored, or authorized by Plaintiffs, when this is not the case,” stated the lawsuit.
The next step in the lawsuit is awaiting a response from the defendants. The lawsuit is ongoing, with the most recent action being from Nov. 1 when Hartvigson’s request for an extended deadline to respond to the lawsuit was granted. The defendants are required to submit a response no later than Wednesday and a court date has yet to be set.
“The universities will say that it really compromises their brand, and typically it does. Some of the knockoffs are pretty cheesy, and so it does ultimately compromise the brand and they are trying to protect their name which they have to do or else the issue will run rampant,” Ellis said.
The request submitted by the universities to the court demanded a jury trial in order to have the sportswear companies convicted of counterfeit, infringement and deceptive practices that they say created unfair competition. In addition, the universities are seeking to prevent these sportswear companies and anyone working with them from continuing to use the Pac-12 logos, to destroy all materials that bear the logos and to redistribute all profits made from the sales of these products.
Perkins Coie LLP and Haynes and Boone LLP, the two firms representing the Pac-12, declined over the phone to comment on the current status of the lawsuit.