Under Armour allegedly cyber-squatting on Nike trademark

Nike Inc. has filed suit against performance apparel company Under Armour, alleging trademark infringement of the company’s trademarked term Dri-Fit.

According to Nike, Under Armour is “cyber-squatting” on Dri-Fit and three variations on that term in web domain names. Dri-Fit, Nike’s name for its moisture-wicking technology, was originally trademarked by Beaverton, Ore.-based Nike in 1990. In court documents filed April 1 in the U.S. District Court of Oregon, Nike is asking for, among other things, damages of $100,000 for each of four cases of cyber-squatting, plus all profits Under Armour may have gained from using the trademarks for its gain, as well as attorneys’ fees. The company’s complaint cites consumer confusion and an attempt by Under Armour to “exploit the initial interest of Internet users in Nike’s Dri-Fit products to divert those users to Under Armour’s Web Site to seek to obtain sales for itself.”

“Under Armour registered the domain name of Dri-Fit.com and variations on that — any sort of variation of Dri-Fit,” Scott Reames, Nike corporate spokesman, told SNEWS. “Once you click on that, it redirects you to the Under Armour web page.”

Now, the pages for www.dri-fit.com, www.drifit.com, www.dri-fitone.com, and www.drifitone.com simply say “under construction.” But a search by SNEWS on Network Solutions for the owner of the domain names shows they are all registered to Under Armour, with an administrative contact at the Baltimore, Md.-based company of David Demsky, who filed for the registrations on June 8, 2001.

“We don’t really have anything to say, probably no comment,” Under Armour marketing director Steve Battista told SNEWS about the lawsuit. He said the company first heard of the lawsuit from a reporter last week and its own attorneys were now reviewing the claims.

Upstart performance active and underwear company Under Armour has been a media darling — even being profiled by Time magazine in January — with its exponential growth since it was founded by Kevin Plank in the mid-90s. Battista said the company more than doubled its annual sales in 2002 to $55 million, and it expects to double them again this year. The success story plays heavily on founder Kevin Plank’s mission to keep himself dry while playing sports and that he dreamed up the concept in his University of Maryland dorm room. Plank was football team captain and finishing a degree in business management when he came up with the company idea. He sold his first garment, a skin-tight shirt, in 1996. Now the company has multiple lines of clothing, both tops and bottoms, for both men and woman, designed as underlayers or outerwear for high-intensity workouts.

SNEWS View: Sounds like former little guy Under Armour thought it could sneak under the radar when it absconded with trademarked terms. But the little guy became a big guy and the trademarked terms just so happen to belong to the 500-pound gorilla of sporting goods, Nike. What was Under Armour thinking to imagine for a moment it could get away with the ploy? Now that Under Armour is a contender for a chunk of Nike’s business, the Swoosh won’t stand for such actions. Under Armour may need more protective armour considering the spanking it may receive as a result.