Premier Goal Club LLC and Balanced Tech Corp. filed a lawsuit against Umbro IP Holdings LLC seeking $90 million in damages for alleged breaches of trademark licensing agreements.
The lawsuit was filed Saturday night in a New York State Supreme Court in Manhattan. The 12-page complaint alleged breaches of the agreements regarding the “‘Umbro’ trademark and of the implied covenant of good faith and fair dealing” by Umbro, an affiliate of Iconix Brand Group Inc. Iconix, a brand management firm, owns the Umbro brand and related intellectual property assets. PGC is the footwear licensee, while BTC is the intimate apparel licensee.
The court document said Umbro — referred to as Iconix in the lawsuit, although Iconix itself is not a defendant in the case — “has purposefully hindered PGC’s ability to perform under its contract, has misled plaintiffs about its business plans and has notified plaintiffs of its intentions to enter into a new licensing agreement with a major retailer, without giving the plaintiffs their contractually guaranteed rights to continue selling licensed products for a transitional period,” as provided for in the agreements.
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According to the complaint, the name of the retailer was disclosed to the plaintiffs but was not specified in the court document.
The court document detailed each licensing agreement, indicating that they were similar, and contained a provision that, under certain limitations, gave Iconix permission to have a “direct-to-retail” arrangement. The latter would involve Iconix granting a retailer the right to use the Umbro trademarks that were under license. The document said the right to engage in “direct-to-retail” was contingent on certain limitations such as meeting certain guaranteed licensing revenue benchmarks and, once met, provided for a transitional period in which the licensee can sell off existing inventory.
PGC claimed that Iconix allegedly interfered with the agreements by having it produce footwear at prices that exceeded Umbro’s market segment, resulting in depressed sales. And the complaint said not allowing a “sell-off” period leaves the two plaintiffs holding worthless inventory and deprives them of revenues they are entitled to under the contracts. It also alleged that Iconix made no attempt to help them secure business from the retailer.
PGC is seeking compensatory damages of at least $84.2 million, while BTC is seeking compensatory damages of at least $5.3 million. The two are also seeking prejudgment interest and any other relief the court deems “just and proper.”
A spokeswoman for Iconix could not be reached for comment.