Kanye Adidas “Breaks Up”, to Whom Does Yeezy with an Annual Copyright Fee of 191 Million Dollars Belong to?

Following Gap and Balenciaga, Adidas recently announced that the brand will immediately terminate its cooperation with American rapper and fashion designer Kanye West. So far, the brands that Kanye has cooperated with have completely blocked it.

The news immediately aroused the attention of global public opinion. Who owns the copyright of the “cash cow” Yeezy? Will Yeezy shoes become out of print? What are the implications for similar cases? In this article, the author will work with the interviewed expert lawyer Feng Chao to solve your doubts.

The mouthpiece does not distinguish the object, Kanye was blocked by major brands

In recent days, Kanye has frequently published radical remarks involving anti-Semitic racial discrimination on social media platforms, which have been violently criticized and criticized. Earlier this month, Kanye was photographed wearing a “white life expensive” T-shirt at the Yeezy fashion show in Paris, causing huge controversy. Kanye also publicly criticized Adidas, Gap and other partners, insisting that Adidas “copied” his design and violated its promise to expand its brand.

Perhaps this brother is used to running trains in the entertainment industry, completely ignoring the consequences of the above dangerous speeches: At present, Kanye’s account has been banned from social media platforms such as Twitter and Instgram, and James’ “The Shop” program It also stated that the interview with Kanye will not be broadcast, Kanye’s brokerage company CAA and its termination, Endeavour Group CEO Ari Emmanuel published a column in the “Financial Times”, calling on all companies to stop cooperating with Kanye…. .. can be said to be very poor (HuoGai).

According to the original agreement, the contracts between Kanye and Adidas, Gap and other brands will not expire until 2026, but as Kanye is deeply involved in public opinion turmoil, brands have to choose to cut it:

In mid-September, Gap announced the early termination of cooperation with Kanye; on October 23, Kering Group, the parent company of Balenciaga, announced the termination of cooperation with Kanye, and would not have any cooperation plans with Kanye in the future, because the latter spread hatred Remarks; On October 25, Adidas announced that the brand will immediately terminate its cooperation with Kanye.

Affected by this announcement, Adi’s stock price fell 9%, and according to Forbes estimates, Kanye’s worth also fell from $2 billion to about $400 million.

After being blocked by major brands, Kanye quickly began to find a home for Yeezy.

According to CNN, after being terminated by Adidas, Kanye ran to the footwear brand Skechers on October 26 for help, but was kicked out.

Skechers immediately issued a statement that afternoon, saying that Kanye came in without notice and without invitation. Kanye and his team, accompanied by two executives from the company, were removed from the building after “a brief conversation,” the statement said.

It is understood that Skechers is a company owned and operated by a Jewish family. Its founder, Robert Greenberg, is Jewish…

Judging from Kanye’s hurried move to find a new home, it is clear that Yeezy and Adi, the newly “divorced couple”, have not discussed who Yeezy belongs to.

The trademark belongs to Kanye, and the product belongs to the brand?

Adidas said in a statement that Kanye’s recent remarks and actions are unacceptable, hateful and dangerous. Adidas will stop making Yeezy-branded products and stop making all payments to Kanye and his company.

Adi also said it would stop producing Yeezy-branded products. So, to whom does the Yeezy brand belong? Who owns the product copyright?

According to foreign media reports, Adidas holds the design rights of the Yeezy series (except slippers) products. After the termination of the partnership with Kanye, the company can continue to use the Adidas brand to sell these products, which will also save a royalty fee and marketing fee.

The last paragraph of Adidas’ termination statement reads that Adidas is the sole owner of all design rights for existing products, past products and new product colorways under the partnership. At present, the termination of the contract between the two has not been made public.

According to CNN analysis, according to industry standards, although Kanye is the owner of the “Yeezy” trademark, Adidas owns the Yeezy shoes. Because Yeezy’s inspiration and creativity came from Kanye’s conception, but Adidas is really responsible for the design and manufacture.

Unlike clothing, sneaker design is more closely related to the technology and patents mastered by shoe giants. A large part of the value of Yeezy sneakers comes from its comfortable wearing experience. The Boost midsole and Primeknit woven fabrics used are both important to Adidas. patented technology.

Legal experts interviewed by CNN said that although Adidas said it would stop the business of adidas Yeezy, they opened the door to remodeling the existing Yeezy design.

Is it correct to say that the trademark belongs to Kanye and the product belongs to Adi? In this regard, lawyer Feng Chao said in an interview with Intellectual Property: “According to the existing trademark registration investigation, the related trademarks of Yeezy in the United States have all been controlled by Kanye, Mascotte Holdings, Inc. ) registration, the number has reached hundreds, including core goods and services.

In China, more than 100 trademarks have been registered with Mascot Holdings, and the designated products include core products such as sportswear. According to the trademark legal systems of China and the United States, unless the two parties make further sanctions according to the agreement, the relevant trademarks will still be owned by Musket Holdings.

The design patents involved in the relevant product design should also be confirmed according to the registration status of the parties in various jurisdictions. According to some information disclosed by the media, the US design patent US D905948S involved in the case was registered by Adidas, and its rights should be owned by Adidas. “

In addition, Kanye has criticized adidas plagiarism more than once in public and on social media. The self-media LADYMAX pointed out that if you study the legal relationship behind this, adidas, as the owner of the design rights of Yeezy shoes, does not have plagiarism at the legal level.

But judging from Kanye’s eagerness to find a next home, he himself does not agree with Adidas’ statement, and it is difficult to “give up” everything related to Yeezy.

This may be confirmed by the trademark application behavior of the Kanye team. According to public documents, Kanye and his legal team filed a trademark application for “YZYSPLY” on June 29, which will be used in retail stores, online ordering services and other products in addition to casual apparel and sportswear. Online retail store services.

At the end of July, the Kanye team also submitted a brand-new retail store trademark application, which also attracted the attention of the industry. Two months later, there was news that Kanye and his company Mascotte Holdings Inc. had submitted a trademark patent application for Donda Sports, including accessories, sportswear, clothing and other categories.

Regarding Kanye’s series of contract termination and trademark registration behavior, lawyer Feng Chao said from another angle: “According to the information disclosed by the media, Kanye has terminated the cooperation contract with some manufacturers including Adidas. If the relevant information is true, Then the production and sales of Yeezy brand products owned by Kanye will face a reorganization. For related sportswear products, the technology and appearance they contain are of course the foundation, but because the related products are fast-moving consumer products , which are replaced more quickly, so trademarks seem to play a greater role in product marketing.”

Lawyer Feng Chao said, “Kanye has done a good job of arranging the layout of its brand. Especially when its trademark is associated with my name, strengthening the power of the brand through registration and protection is conducive to his personal effective control of the brand.

The core of the joint name between the individual and the brand is to apply for registration in time. In our country, there are many cases of famous person’s name being squatted. Early filing of applications in the relevant commodity category remains a priority. “

Yeezy price soars, will it become out of print?

After the news of the termination of the contract between Adi and Kanye, Yeezy ushered in a resale boom in the second-hand market as consumers (and scalpers) worried that Yeezy would become out of print.

Within hours of Adidas’ announcement, the Yeezy Boost 700 rose to No. 2 on eBay’s list of the best-selling sneakers, with prices expected to jump 50 percent. According to data collection platform WANTD, as of Tuesday morning, nine of the 25 best-selling pairs on the sneaker resale site were from Yeezy, a surge from the previous six weeks.

Will Yeezy shoes go out of print?

In this regard, Morgan Stanley and RBC Capital Markets analysts revealed that Adidas management has indicated that it will use the company’s own brand to sell the series of products early next year. “Going forward, it is our understanding that the company will no longer sell any Yeezy-branded products, and all Yeezy product lines will be under the Adidas brand,” Morgan Stanley analyst Edouard Aubin said in a note to clients on Tuesday. “

That is to say, the future Yeezy shoes may be “change the soup without changing the medicine”, but the brand name has changed from Yeezy to Adidas, and the product itself will not be affected.

For products sold in China, lawyer Feng Chao said that the sale of brands in China depends on many factors. Only from the perspective of intellectual property rights, it depends on the re-licensing arrangements of relevant parties for intellectual property rights.

If the different types of intellectual property rights of related products, including patents, trademarks and copyrights, belong to different rights holders, they must be authorized by all rights holders before they can be produced and sold.

Adidas paid Kanye West $1.91 for royalties last year

Talking about the birth history of Yeezy, Adidas is not the “original match”.

In the early years, Kanye collaborated with Nike to create the Air Yeezy series. In 2013, Kanye switched to Adidas. The two parties signed an agreement in 2016 to produce and distribute Yeezy series products. The Yeezy series designed by Kanye became one of the most popular shoes in the fashion shoe market.

Adidas said that the breakup with Kanye is expected to have a short-term impact of 250 million euros (about 1.8 billion yuan) on the company’s net income in 2022. Adidas’s financial report shows that in 2021, the brand will pay as much as $191 million in royalties to Kanye, which corresponds to about $1.7 billion in sales of the Yeezy series of sneakers.

Before “breaking up” with Adidas, Kanye “derailed” Gap again, and planned to establish his own business and create a sports brand “Donda Sports”. Gap had hoped to work with Kanye for ten years, but the relationship between the two sides lasted less than two years.

Dongda Sports has launched a complete line of sportswear products, and some items have been put on public sale, which was once a good momentum. However, with the fermentation of this incident, its only two well-known players: NBA star Jaylen Brown and NFL superstar Aaron Donald also recently announced that he and Kanye will cut their seats.

So far, the Yeezy myth created by Kanye is already in jeopardy.

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