Andrew Masson is an IPilogue Writer and 2L JD candidate at Osgoode Hall Law School.
One of the biggest names in golf that is not Tiger Woods, Jack Nicklaus is being sued by Nicklaus Companies L.L.C. for breach of a $145 million deal for the exclusive use what is being incorrectly reported as “name, image, and likeness (NIL)”. Nicklaus, also known as The Golden Bear, is 82 years old and widely regarded as one of the greatest golfers of all time. During his career he won 117 professional tournaments and 18 major championships, which is 3 more than Tiger Woods. Retired Nicklaus now heads his golf course design and construction company, Nicklaus Designs. Nicklaus is one of the most prominent names in golf, so this recent filing has garnered the attention of sports reporters.
On May 17, the reported court filings involving Nicklaus involved both IP use and NIL issues. In May 2007, before the concept of name, image, and likeness became popularized by the USA’s NCAA ruling for college athletes, Nicklaus appears to have made a similar deal except it was for “exclusive rights to valuable intellectual property and services”. This agreement involved three parties: 1) Jack Nicklaus; 2) GBI Investors Inc.; and 3) Nicklaus Companies L.L.C. Nicklaus incorporated GBI Nicklaus in 1984 and he remained manager when the deal was made in 2007. This deal involved selling business and assets of GBI that related to Jack Nicklaus to Nicklaus Companies. The IP rights and activities related to both Nicklaus as a person and his golf course design and construction activities made the deal worth more than $145 million.
Nicklaus Companies claims they have paid and continue to pay both Nicklaus and GBI who are not meeting their obligations. Niklaus Companies seems to have put forth three major complaints for which they are seeking injunctions and damages: 1) Jack Nicklaus continues to make deals regarding his IP and excluding Nicklaus companies from them; 2) these actions are damaging to Nicklaus Companies; and 3) Jack Nicklaus has threatened to continue to do these activities by unilaterally reclaiming ownership of those rights he sold. At first, the deal appeared to transfer the numerous patents and trademarks from GBI to Nicklaus Companies, but in recent years Jack Nicklaus and GBI have not satisfied the deal. Jack Nicklaus has repeatedly entered deals regarding his golf course designed in addition to entering a deal to profit of his NIL that excluded the company.
Notably, this story broke within days of Jack Nicklaus turning down Saudi Arabian golf series organizers’ offer of more than $100 million to be the face of a new golf series. Though not directly related to this case, his decision may be relevant to broader branding issues associated with his name.
This interesting case will likely become a battle over the terms of the contract with strong arguments on both sides. From an equitable perspective, it appears Nicklaus entered an unfavourable deal in 2007 that meant in the long term he was forfeiting exclusivity for any future IP related to him. This term mirrors the contracts of most universities (like University of Toronto’s patent policy) where professors are not the exclusive IP owners for independent work completed during employment. These contracts can be contentious if they give off the impression that those with money can exploit resource-strapped inventors. On the other hand, the Jack Nicklaus company paid a substantial sum of money on the belief that they would retain the Jack Nicklaus IP into the future. Under the principle of freedom of contract, the Nicklaus Company does not appear to have violated the terms of the agreement and they just want to receive what they have paid for and did not force Nicklaus and GBI to enter the contract. As this case was just filed, it will likely be some time before a decision or settlement is reached. But if it gets to trial, there will likely be interesting arguments on the contracting of IP.