In an unusual win for a small business, Lontex, a Norristown, PA-based company, has been awarded over $5M in its trademark infringement lawsuit against Nike, despite the sports giant’s attempt to drown the smaller company in legal costs. Judge Michael Baylson of the U.S. District Court for the Eastern District of Pennsylvania last week ordered Nike to pay more than $5 million in attorney’s fees to Lontex Corp, which brings an end to the eight year long battle between the two companies.

Lontex, which produces compression sportswear under the “Sweat It Out” brand, had originally sent Nike a cease and desist letter back in 2016 when it discovered that Nike was infringing on its “Cool Compression” trademark. Nike was using the term to describe compression apparel in its “Nike Pro” line. When Nike failed to stop using the trademark, the two embarked on a costly legal fight with a 2021 jury trial finally finding in favour of Lontex.

However, the battle didn’t end there. Following an appeal, which Nike lost, a judge issued a court ordered review of its conduct in the case owing to the unethical tactics which Nike had used. The report found that the sports giant knew that it was violating the Lontex owned trademarks, but that ‘it just did not care.’ Further, Nike’s litigation tactics were found to be ‘unreasonably aggressive’ including unnecessary delays in order to bury the smaller company in legal costs in the hope that it would be forced to drop the lawsuit or go under altogether.

It’s an unfortunate truth that IP laws are heavily stacked in favour of the man with the deeper pocket. While a small business owner may own trademarks or registered design rights, a legal battle to defend them can quickly eat up capital and in some instances result in bankruptcy. Large corporations often attempt to bully small brands into giving up their IP rights by drowning them in legal documentation. Many of these smaller brands owners find themselves in a David and Goliath situation and just don’t have the finance, time or team of lawyers required to take on a legal challenge and enforce their rights. The case highlights, however, that there’s still hope for the little guy!