* Mass. sportswear firm sues Nike, Hall of Fame
* SportsFuzion claims contract breach, fraud
* Seeks more than $10 million in damages
* Jordan to be inducted into NBA Hall in September
(Adds Nike comment in paragraph 3)
By Ben Klayman
CHICAGO, June 24 (Reuters) - A Massachusetts sportswear
company has sued Nike Inc (NKE.N) and the U.S. basketball hall
of fame, claiming breach of contract and fraud related to the
manufacture and sale of sportswear linked to Michael Jordan's
upcoming induction into the hall.
SportsFuzion Inc filed the lawsuit in Massachusetts state
court late on Monday and is seeking more than $10 million in
general and punitive damages from Nike and the Naismith
Memorial Basketball Hall of Fame in Springfield,
Massachusetts.
A Nike spokesman said company officials were reviewing the
complaint, but believe it is without merit. Officials with the
Hall of Fame could not be reached for comment.
The Millis, Massachusetts-based SportsFuzion said in court
documents filed in the Norfolk Superior Court that in March
2006 it signed a contract with the Hall of Fame giving it
exclusive worldwide rights to the organization's trade names,
logos, trademarks, designs and photos for use in sportswear
through 2012 or later considering renewal rights.
The lawsuit also charges Nike with interfering with a
contract and charges both parties with unfair and deceptive
trade practices.
Jordan, considered one of the greatest players in the
history of the National Basketball Association, as well as a
popular marketer whose image drives sales for sneakers and
other sportswear bearing his name, will be inducted into the
Hall of Fame in September.
SportsFuzion's co-founder and president, Andrew Mirken,
said he foresaw in 2005 the potential for linking his company
to Jordan's entry into the Hall of Fame.
"I knew that Michael Jordan's induction would be the
biggest event in the Hall of Fame's history and, like his
impact on the NBA and the game of basketball, this product
opportunity was enormous," he said in a statement.
"Having Nike and the Hall of Fame go behind our backs to
cut us out of the deal has become my worst nightmare," Mirken
added.
SportsFuzion cited Nike's plan to release an Air Jordan
Hall of Fame Collection this summer and the sportswear giant's
recent launch of a marketing campaign to promote those sneakers
and apparel. SportsFuzion pointed to estimates that Nike could
sell more than $100 million of such products globally.
After signing its agreement in 2006, SportsFuzion said the
NBA helped arrange meetings with several potential partners,
including Nike and Adidas AG (ADSG.DE).
SportsFuzion said it met multiple times with executives
from Nike's Brand Jordan, but Nike turned down a deal in
November 2007.
SportsFuzion said two months later the Hall of Fame asked
to renegotiate their deal, adding it did not understand the
totality of the rights granted in the original deal and the
agreement was not good for the Hall of Fame. SportsFuzion said
in court documents that the Hall of Fame then claimed breach of
contract and terminated their deal.
Beaverton, Oregon-based Nike is scheduled to report
quarterly earnings late on Wednesday afternoon.
The case is: SportsFuzion Inc vs. Nike Inc and Naismith
Memorial Basketball Hall of Fame Inc, Norfolk Superior Court,
Massachusetts, No. 09-01067.
(Reporting by Ben Klayman, editing by Matthew Lewis)
