Why Nike Is Suing New Balance 👟

Plus Netflix weighs up Jake Paul offer and Prime Hydration hits new record.

Welcome to Athletic Interest.

We would like to take a moment at the start of this week’s newsletter to give a small dedication to some of the most overworked people in the industry…Nike’s legal team. 

Seriously, if anyone deserves an extra few days off work it’s this lot. 

In total, Nike now has 34 thousand patents across the globe. For comparison, Adidas has just 4 thousand patents. 

That’s 34 thousand patent applications, most of which will reach more than 20 pages each. Then there is all the work that must be done to uphold and protect these patents. 

This can range from constantly checking the internet for knockoffs to actively taking your rivals to court. 

Adidas, Lululemon, Stock X and Puma are just some of the major brands that Nike has taken to court for alleged patent infringement in recent years. The Swoosh also managed to stop Max Verstappen from launching a clothing line with the name ‘Max 1’ because it violated Nike’s right to the Air Max name. 

Nike has now set its sights on New Balance and Skechers. 

Earlier this week, Nike initiated legal proceedings against these two rivals for allegedly stealing its ‘Flyknit’ technology. 

This is quite a complicated technology, but all you really need to know is that Nike was able to develop a computer-controlled knitting process that creates shoes with 80% less waste than the traditional manufacturing process. 

Less waste means more profits and a lower environmental impact. It wasn’t long before rivals started to release similar shoes that implement a similar process. 

Nike claims that several shoes including the Fresh Foam X 1080 v12 from New Balance and the Ultra Flex 3.0 from Skechers are direct copies of Flyknit and breach several patents. 

Nike argues that it has spent more than a decade perfecting this technology and accuses New Balance and Skechers of attempting to profit from the success of its development. 

New Balance has since responded and claimed that the technology on which Flyknit is based has been used in the industry for decades and Nike cannot have exclusive rights over its usage. 

This could be an important moment for the sneaker industry. Reducing waste is of huge importance for these big brands. The technology behind Flyknit is clearly effective at reducing waste while still creating an attractive and high-performing product. If Nike prevails it will have greater control over how the technology is used, to the detriment of its rivals. 

That being said, this could also disappear without a trace. Nike also sued Adidas and Puma for similar violations and settled both cases without much damage being done.

This isn’t the only time that Nike has used the legal system to get ahead. In the 80s, Nike made knockoff versions of its own shoes to get around a customs rule that could have bankrupted the company. Learn more in our video:

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🥊 Netflix Weighs Up Jake Paul Live Event

Streaming companies have disrupted everything from date nights to DVDs. Now they are coming for sports.

While Amazon, Apple and DAZN are taking a more traditional route and bidding for the live rights to some of the biggest sports, Netflix has been taking a more chill route.

Netflix has long been hesitant to go big with live sports. We wrote recently about how Netflix has no plans to bid for the Premier League or NFL, but would rather focus on documentaries and one-off live events that allow it to crossover with other content it owns.

The perfect example of this is the upcoming golf series called the Netflix Cup which will see Formula 1 stars from Drive to Survive competing against PGA pros from Full Swing.

It looks like this will be a running theme for Netflix going forward. There are reports that Netflix will look to stream an upcoming Jake Paul fight on the platform. This will be a perfect tie-in with its recent documentary about Paul. 

Apparently, Netflix views Jake Paul as the perfect test case for a wider venture into live sport. That being said, still expect Netflix to avoid the larger sports. Their focus has always been on drama, something that’s easy to guarantee with Jake Paul and documentaries but much harder across 90 minutes of football.

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🥤 Prime Hydration closes in on one billion sales.

Jake Paul isn’t the only Paul brother involved in a fight. Older brother Logan and the Prime Hydration brand he started with KSI is fast becoming a challenger to the likes of Gatorade and Powerade. 

According to Logan and KSI, Prime Hydration recently hit more than 1 billion bottles sold, with sales set to reach more than $1.2 billion. Last year, sales were at around $250 million.

While that is still around $5 billion short of Gatorade’s annual turnover, it’s considered the fastest ascent by any drinks brand in history. 

While most of this uptick can be attributed to the large social media audiences of the two founders, there are signs that Prime Hydration is morphing away from an influencer brand. 

Prime has recently signed several athletes and sports teams including Erling Haaland, Arsenal, Barcelona, and Bayern Munich.  

This suggests that Prime wants to move towards the more traditional exposure that comes with sport and balance that with the brand’s use of viral stunts through social media.

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