Software company accuses Nike of copyright violations

Nike is being sued for copyright infringement and breach of contract by a software company it signed a licensing agreement with more than 15 years ago.

Quest Software filed the complaint at the US District Court for the District of Oregon, Portland Division, on Tuesday, April 24.

Global company Quest develops software for cloud management, security, and database management. It offers licences for its services through the company, as well as through authorised retailers. In 2001, sports brand Nike entered into a licensing agreement with the software company.

According to the lawsuit Quest’s software consists of copyright-protected subject matter. The company has a built-in security system which requires customers to enter their licence key to unlock the software.

However, Quest said third parties have created pirated licence keys which can be illegally downloaded to “those who might seek to avoid paying the proper licence fees” from sites such as BitTorrent. Inputting the pirated key creates a file path which evidences the use of the unauthorised access.

The lawsuit said that Nike acquired a fixed number of licences for specific versions of Quest products in 2001, as a result of the licensing agreement between the companies. As part of the agreement, Quest retained the right to review Nike’s use of the software.

Quest said it audited Nike’s software in January 2017 and this audit revealed that the sports brand deployed the products “far in excess of the scope allowed” by the agreement.

It also showed that Nike used pirated keys to bypass the system and make unauthorised copies of Quest’s software, the complaint said, and Nike refused to purchase the additional licences necessary to render its activities complaint with the licence agreement.

Quest is seeking a trial in relation to Nike’s alleged breach of contract and “wilful” copyright infringement.

The software company said it continues to suffer as a result of Nike’s activities. It has requested injunctive relief as well as damages, plus interest, and the award of attorneys’ fees.

Nike recently secured a win at the US Court of Appeals for the Ninth Circuit, after defeating copyright allegations brought by a sports photographer.