7:44am PT by Eriq Gardner
Jay Z's Roc Nation Accused of Undermining $204 Million Licensing Deal
Jay Z (Shawn Carter) might have once boasted that he "made the Yankee hat more famous than a Yankee can," but according to a new lawsuit, he long ago traded away his company's right to sponsor such a hat.
The lawsuit comes from Iconix Brand Group, a brand manager whose portfolio includes Marc Ecko, Umbro and Artful Dodger. The company is now suing Roc Nation, Jay Z, Major League Baseball Properties and other entities in New York federal court. According to the lawsuit, special "Roc Nation" baseball caps on the market have denied Iconix the benefits of a licensing agreement.
Iconix Brand Group says that in 2007, it forked over $204 million and was conveyed certain intellectual property from Jay Z's Roc Nation. Six years later, a dispute arose between the two companies. The nature of the quarrel as well as the precise resolution is somewhat unclear thanks to heavy redaction in court documents, although there's some suggestions the parties were at odds over the scope of the licensing deal.
Nevertheless, Iconix continued to enjoy an association with Roc Nation and Rocawear until recently. According to its most recent securities filing, Iconix reported $800 million in Roc Nation revenue for 2014 and 2015.
But along came another company called New Era, continues the complaint, which made its own deal with Roc Nation to produce baseball hats bearing the Roc Nation logo. New Era became an official partner of Major League Baseball and began selling specially designed caps, including those pictured below.
Here's where it gets nuanced.
According to the complaint, the San Francisco Giants, an MLB ball club and one of the co-defendants, "approved and authorized its 'SF' logo and trademark to be used on the New Era Caps, knowing and approving such use of its mark along with the name and logos of New Era, MLB, and ROC NATION. SF Giants intended to commingle its logo with the ROC NATION mark in order to seize upon the popularity and strength of the ROC NATION mark to increase sales of the New Era Caps in order to enjoy more royalty payments from MLB and to secure additional profits."
Iconix says it wasn't consulted nor did it approve of this.
The complaint states: "As a result, Carter and his various companies...have deliberately undermined a series of agreements, after receiving millions in substantial compensation from Plaintiffs, by continuing to use and exploit in business the very property already conveyed to Iconix and Studio IP by contract."
Iconix also alleges that Roc Nation is violating rights by selling apparel through the label's website.
Here's the complaint from Iconix, represented by attorneys at Blank Rome. The plaintiff brings various trademark, contract, interference and unfair competition claims and demands both injunctive and monetary relief.
A spokesperson from Roc Nation hasn't yet responded to a request for comment.