Nike Loses Bout Against Sideout

In a trademark infringement dispute, Pasadena sportswear maker Sideout Sport won a federal court order Wednesday temporarily barring apparel giant Nike Inc. from selling or advertising its Side 1 line of women’s footwear and accessories.

The ruling will apparently sideline Side 1 for the Christmas retailing season, a heavy blow to the line, which Nike said has annual sales of about $6 million.

“It’s a major legal victory for Sideout,” said Mark Harmon, general counsel for the company, which had 1990 sales of about $15 million.

Sideout Sport, in a $10-million lawsuit filed in U.S. District Court in Los Angeles last June, charged Nike with infringing on the smaller firm’s distinctive name and logo.

Company founder Stephen Ascher Jr. created the name and logo eight years ago as a senior at UC Berkeley. The name and clothing are associated with beach volleyball, which Sideout Sport uses to market its products.

U.S. District Judge David V. Kenyon issued a preliminary injunction against Nike’s using its current lettering style and logo design for Side 1, pending a trial. He said that Sideout Sport had a strong likelihood of winning the case and that it could be irreparably harmed without an injunction.

“Based on the similarity of the two marks . . . there is a likelihood that consumers will think that Side 1 is actually Sideout or a different product line made by Sideout,” the judge wrote.

Even worse, according to Harmon, because of Nike’s much larger advertising budget, an impression was being created that Sideout Sport was imitating Side 1.

Nike corporate counsel Lindsay Stewart said that although the company expects to win at trial, “No question about it, this is going to be a major disruption to the efforts of Side 1.”