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

from the live-by-the-ip-die-by-the-ip dept

Tue, May 8th 2018 3:29pm — Timothy Geigner

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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Filed Under: audit, copyright, software, trademark
Companies: nike

31 Comments

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Ninja (profile), 8 May 2018 @ 2:07pm

Just do it.
When your sense of entitlement is much bigger than your actual value.
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Capt ICE Enforcer, 8 May 2018 @ 3:40pm

Simple reason
Well as they say. "Just Do It!"
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Anonymous Coward, 8 May 2018 @ 4:08pm

You are so two weeks ago. Another re-write from Torrent Freak.
You add nothing -- in fact your swamp of verbiage subtracts -- should give nothing more than a link. -- And should have that TWO WEEKS AGO!

C'mon, people. There's an entire world and all you do is re-write what everyone has already seen? -- And do you wonder why ad revenue has plunged?
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Anonymous Coward, 8 May 2018 @ 4:11pm

Re: You are so two weeks ago. Another re-write from Torrent Freak.
We all eagerly await your exciting and informative contributions.
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Roger Strong (profile), 8 May 2018 @ 4:20pm

At least they play fair on the tr...

When Arien O'Connell posted the fastest time in October's Nike Women's Marathon in San Francisco, she expected of course to be declared the winner, but the shoe company apparently had promised a group of elite runners (to attract them to enter the race) that one of them would be the "winner," and consequently, first place went to a woman who ran 11 minutes behind O'Connell. After a storm of complaints, Nike reluctantly settled on calling both women "winners" and said next year it would scrap the two-tier system. [San Francisco Chronicle, 10-23-08]

..ack!
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Anonymous Coward, 8 May 2018 @ 4:26pm

Re: You are so two weeks ago. Another re-write from Torrent Freak.
The Torrent Freak article is almost entirely limited to the facts of the situation. No mention of Nike's previous copyright history, no mention of "a few employees going rogue" vs. "upper Nike management", no opinion of how Nike would fare at trial.

The TechDirt article includes a link to, and quotes, the Torrent Freak article, while adding a good deal of the author's opinion of the case, and of Nike, before, between, and after the quoted facts.

If that gets labeled a rewrite, I think that both Fox News and CNN consist solely of plagiarists.

(Besides, I hadn't seen any news of the case until this post. Last I checked, I'm part of everyone. I suggest you dismount your steed, for it appears to be under the influence of marijuana.)
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Anonymous Coward, 8 May 2018 @ 4:33pm

They kick you off their forums for spamming sovcit lit again?
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Stephen T. Stone (profile), 8 May 2018 @ 5:00pm

Re:
If you think you can do better than Techdirt, do better or die mad about Techdirt writers being better than you.
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Anonymous Coward, 8 May 2018 @ 5:23pm

Re: Re: You are so two weeks ago. Another re-write from Torrent Freak.
That's a fair point to make, whether Tim's two Torrentfreak rehashes of last month's articles are up to Mike Masnick's well-footnoted article posted earlier today.

And speaking of writing "yesterday's news", I'm still waiting for Masnick's thoughts about last month's "Wolfgang's Vault" court ruling, of San Francisco concert promoter Bill Graham's lifetime collection of concert "bootlegs" that he had secretly stockpiled and are now public -- a court judgement which was such big news I didn't even bother submitting any links, assuming that Techdirt was probably being flooded with them. It's been a court case that Mike has reported on over the years, and now that it's come to a (bad news) finale .... it's somewhat shocking that nothing more has been said here. Or maybe I've just missed it, and if so I apologise.

Here's one of many links to that story :

https://www.courthousenews.com/music-publishers-win-suit-over-concert-recordings/
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Anonymous Coward, 8 May 2018 @ 5:24pm

Re: Re: You are so two weeks ago. Another re-write from Torrent Freak.
AND the fanboys prove how two weeks ago -- and lame even then -- it is by the usual dog-pile onto any dissent with sheer ad hom, instead of adding even support.

Every time I comment here, I DOUBLE the number of comments because the fanboys are compelled to ad hom. -- Oh, and a screen name not used in four years is STILL the target of random idiocy! THREE or four times just yesterday!

This re-write is not attracting readers. -- Guess except for the one AC who either can't access Torrent Freak, or is too busy to glance over every couple weeks.
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Roger Strong (profile), 8 May 2018 @ 5:37pm

Re: Re: Re: You are so two weeks ago. Another re-write from Torrent Freak.
"I don't think I've ever seen your specific kind of crazy, but I definitely admire your total commitment to it."
- Capt. Jack Sparrow
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Anonymous Coward, 8 May 2018 @ 5:44pm

Re: Re: Re:
So it turns out your favorite corporations can't stand the IP law you love so much. Sucks to be you, don't it?
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Stephen T. Stone (profile), 8 May 2018 @ 6:08pm

Re: Re: Re:
Hey, I have a question: What comments, if any, can you offer in regards to the subject of the actual column?
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Dreddsnik, 8 May 2018 @ 6:15pm

"I'm still waiting for Masnick's thoughts about last month's" Someone who continually uses a persons last name deliberately and disrespectfully as a pejorative is more likely to be ignored than not.
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Uriel-238 (profile), 8 May 2018 @ 6:27pm

I think IP rights are much like morality restrictions.
Everyone is okay with pirating and their friends doing it, but not strangers, and definitely not with IPs they own.

Everyone is okay with having illicit affairs or their friends doing it but not strangers and definitely not with their own spouses.

I may have Poe'd myself. I'm not sure that's a joke.
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Anonymous Coward, 8 May 2018 @ 6:34pm

Re: Re: Re: You are so two weeks ago. Another re-write from Torrent Freak.
lol
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Anonymous Coward, 8 May 2018 @ 6:46pm

Re:
You've obviously never been in the military, where no one even has a first name.

It's always been standard journalism practice to use a person's last name rather than first name in subsequent repetions throughout the body of the article. I've always felt that the rule should be broken when reporting a story about family members who all share the same last name, as it can make for some very confusing reading. However, rules are rules. Even Wikipedia follows this standard of formal writing rather than informal speech.
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Christenson, 8 May 2018 @ 7:35pm

Re: I think IP rights are much like morality restrictions.
Uriel, lol...

IP law is for you, but not for me!
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Anonymous Coward, 8 May 2018 @ 10:55pm

Re: Re:
And you are obviously new here, as blue is definitely using it perjoratively.
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PaulT (profile), 9 May 2018 @ 12:59am

Re: You are so two weeks ago. Another re-write from Torrent Freak.
Yet again, for someone so single-mindedly obsessed with this site, you've still not worked out that its purpose is not as a primary news source. How stupid do you have to be not to realise that this site is about discussion and commentary on stories written elsewhere, given the amount of time you spend here?

Also for someone who constantly, falsely, accuses others of being "pirates", you do seem to be far more knowledgeable about the subjects sources that everyone else around you. Almost as if you're overcompensating for something...
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David, 9 May 2018 @ 1:59am

Let's conflate trademarks and copyrights as IP
because it makes for a great headline and diatribe.

Too bad that we usually try to point out that this does not make sense at all exactly because painting all of this with an overarching coarse brush does not leave room for intentionally free areas of taking up others' ideas.

I don't think that the payoff for this kind of hypocrisy is worth the occasional sensational article that can be wrung from it.
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Dreddsnik, 9 May 2018 @ 2:50am

Re: Re:
"You've obviously never been in the military, where no one even has a first name."

And you would be wrong.
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Berenerd (profile), 9 May 2018 @ 4:14am

The Quest is there.....Just do it!
I am not sure about Quest, but software companies I have dealt with usually do the checks twice, if their numbers don't add up we get a third impartial company to come in and check. Then again, I have never been in that type of situation with a company as large as Nike.
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Anonymous Coward, 9 May 2018 @ 4:39am

what is the price of a fine? is it $150,000 per infringement, as with music/movies? is it like it would be if this were an ordinary member of the public? if it were, there would be no reductions, with the maximum would be demanded!
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JoeCool (profile), 9 May 2018 @ 5:23am

Re: Re: Re:
That's right! Of course, nearly everyone they enlist has the first name "Private". Don't you wish your name had been "Sergeant"? :D
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Anonymous Coward, 9 May 2018 @ 5:36am

Re: Re: Re: Re:
Or, better yet, Major.
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Ninja (profile), 9 May 2018 @ 6:04am

Re: You are so two weeks ago. Another re-write from Torrent Freak.
Sir, you need to take your medicine. Also, if you don't like reading more in depth analysis of earlier news then don't! It's simple and it will keep your blood pressure lower.
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Anonymous Coward, 9 May 2018 @ 6:43am

Hypocrisy is for little people
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AR Libertarian (profile), 9 May 2018 @ 8:13am

Been there
Worked at a software company MANY years ago. No one had proper licenses for M$ Word on their PCs. Obviously, EVERYONE needs word processing in an office. So disks and keys were passed around.

Anyway, M$ found out, audited, wanted money, PCs were cleaned, and we were all given WordStar, a shareware(?) word processing program.

Amazing how the world looks different from the other side of the fence.
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David, 9 May 2018 @ 8:54am

Re: I think IP rights are much like morality restrictions.
Ah, but the thing you want to avoid with copyright et al is germinating others, not yourself.

I mean, have you ever seen a popstar suing a groupie who maliciously let herself get pregnant and raised offspring so successful that it cannibalized his market, utilizing his genetic property?

I mean, we actually have seen court cases like that with genetic engineering, but I don't think they have been brought up in consequence of straightforward fornication. They are usually the other way round.
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Anonymous Coward, 11 May 2018 @ 9:09pm

Poor Nike doesn't have any money to pay for software licences. :(
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