Lawsuit alleges Kraken violated Metropolitans trademark with Winter Classic jerseys

SEATTLE — In the years leading up to and beyond the Kraken’s creation in December 2018, Bellevue entrepreneur Paul Kim was a familiar hockey presence at the upcoming team’s events alongside its founders and future executives.

A longtime youth player and fan, the South Korean-born Kim, who moved to Seattle at age 10, was still in college in 2014 when he acquired trademark rights to the name, “S” logo and colors of the defunct Seattle Metropolitans franchise and began selling branded merchandise in the team’s name. That preceded the 100th anniversary of the Metropolitans winning the 1917 Stanley Cup and as professional hockey’s imminent revival in Seattle gathered steam, Kim and his vintage-design merchandise became a fixture at local events alongside top Kraken brass and the Oak View Group company that overhauled what’s now Climate Pledge Arena.

But that relationship has been deteriorating behind the scenes, the degree to which is outlined in a 24-page trademark infringement lawsuit filed by Kim against the Kraken’s ownership on Wednesday in U.S. District Court. Kim alleges the Kraken violated his trademark rights in the design of its NHL Winter Classic jersey for the team’s upcoming New Year’s Day outdoor game against the Vegas Golden Knights at T-Mobile Park, claiming it contains a “virtually identical” red “S” logo and lettering to that used by the Metropolitans.

Further, the lawsuit alleges the Kraken made Kim “low-ball” licensing offers in recent years for rights to sell the trademarked Metropolitans’ logo and colors, including earlier this year as it sought to incorporate both within its Winter Classic jersey design. The lawsuit alleges Kim rebuffed all offers as well below market value and the Kraken’s legal counsel, Lance Lopes, informed him last February the team would pursue an “alternative” Winter Classic jersey.

The lawsuit alleges that Kim subsequently told the Kraken he expected any Winter Classic jersey to have “a completely different design concept” from Metropolitans trademarks and was advised in writing the team was “going in a different direction.” Instead, the lawsuit alleges, the team “did exactly the opposite” and incorporated “virtually the identical” Metropolitans logo, colors and horizontal color band within its Winter Classic jerseys and even referenced the prior Cup win by featuring “1917” prominently on the collar.

Kim and his company, Seattle Metropolitans Hockey LLC, which sells branded merchandise in 34 U.S. states and some foreign countries, claim the Kraken’s use of confusingly similar branding cost it an estimated $2.5 million in lost sales and goodwill and is seeking at least that amount and possibly more from Kraken owners Seattle Hockey Partners LLC depending on the court’s findings. In addition, the lawsuit seeks a temporary and permanent injunction blocking the Kraken from using Metropolitans trademarks — though there isn’t time to block the Winter Classic jerseys at Monday’s game.

The Kraken have yet to respond in court. A Kraken spokesperson said Thursday: “We are aware of the filing and are working with our lawyers to respond. We cannot comment further on an active legal matter. Our focus is on delivering an incredible NHL Winter Classic experience for our fans and celebrating outdoor hockey together.”

The Metropolitans played in the defunct Pacific Coast Hockey Association from 1915-1924, defeating the Montreal Canadiens in 1917 to become the first U.S.-based Cup winner. In unveiling the Kraken’s Winter Classic jersey last month, team vice president (brand) Aaron Wiggan said in an interview it had a stylized “S” logo reminiscent of what the Metropolitans wore, but focusing on the Kraken’s current one — with a red eye and the word “Kraken” snaking across it in vintage crooked lettering.

Wiggan also said the jersey contained Kraken colors — “Midnight Blue,” “Ice Blue” and “Red Alert” — and off-white, cream color mixed in for an old vintage textile feel. He added that “block striping” on the jersey and socks paid homage to what the minor professional Seattle Ironmen wore in the early 1950s.

Still, the extent of the dispute between the Kraken and Kim, who the team once actively promoted on its social media accounts, is eye-opening.

Kim’s lawyer, trademark litigation specialist David Lowe of the Seattle-based Lowe Graham Jones firm, released a statement on Thursday saying the legal action was taken because the team rebuffed efforts to settle things amicably.

“Seattle Metropolitans kept alive the spirit of the original professional team and has, over the past roughly 10 years, built on that history,” it says of Kim’s company. “Seattle Metropolitans was shocked that the Kraken copied its famous trademarks in an obvious attempt to create a false association with its brand and confuse the public, including the great Seattle hockey fans—particularly given the long history of support the Kraken has received from the Seattle Metropolitans.”

The lawsuit alleges that Kim in early 2018 reached out to Tim Leiweke and his Oak View Group looking to form an association. Kim, the lawsuit alleges, was told OVG liked his Metropolitans brand work and invited him to a public open house to help highlight their proposed overhaul of KeyArena.

For the next five years, the lawsuit alleges, OVG and then the official Kraken team ingratiated themselves to Kim and his company to “reference the valuable ‘S’ logo and Seattle Metropolitans brand” and connect the former team to their coming hockey venture. The lawsuit says the Kraken asked Kim in February 2020 to use Metropolitans’ colors in a promotional video and he agreed based on assurances they were developing a good faith business relationship.

The lawsuit says that since 2015, Kim’s company sold or licensed thousands of branded Metropolitans products — including jerseys, T-shirts, sweatshirts, hats, beanies, pants, shoes, socks, masks, banners and stickers — and he envisioned taking things to a higher level with the Kraken. But, according to the lawsuit, when the team formally approached him in July 2020 looking to license Metropolitans trademarks, Kraken legal counsel Lopes offered a lone season ticket account in exchange for jersey rights. The offer came as a “shock” to Kim, the lawsuit alleges, adding he immediately refused.

The lawsuit alleges the Kraken soon after offered Kim a licensing deal paying him 5% of net sales, with no minimum guarantee, no online sales, no resale and no sell off period for existing licenses. But Kim again refused, it alleges, because typical industry licenses paid 12%-to-15% on all gross sales and included minimum sales requirements and sell off periods on existing licenses.

Five months later, in January 2021, the suit alleges, Kim rejected a similar offer with a “low” minimum sales guarantee.

Later that year, the lawsuit says, the Kraken hung a Metropolitans championship banner with the trademarked “S” logo from the rafters on opening night at Climate Pledge Arena without Kim’s permission.

Fifteen months later, this past January, the lawsuit says the team contacted Kim about purchasing and extinguishing all rights in Metropolitans trademarks ahead of designing its Winter Classic jersey with adidas. But talks fell apart, the suit alleges, when the team offered a one-time payment worth less than a year of revenue from sales of branded Metropolitans products.