Bethany Krajelis Feb. 19, 2014, 6:05pm

Basketball legend Michael Jordan will be able to move forward with his lawsuit against Jewel Food Stores over an advertisement the grocery store chain ran in a 2009 commemorative issue of Sports Illustrated that congratulated the former Chicago Bulls’ great on his induction into the Hall of Fame.

In an opinion handed down today, a panel of the Seventh Circuit Court of Appeals reversed a ruling from Chicago’s federal court that sided with Jewel in its defense to Jordan’s $5 million trademark and right-of-publicity lawsuit.

While the ruling doesn’t amount to a slam dunk for Jordan, it did award him the jump ball, so to speak, in the parties’ dispute over whether Jewel’s ad constitutes commercial or noncommercial speech and gives him a shot to argue his specific claims against the chain.

Determining that U.S. District Judge Gary Feinerman was wrong to classify Jewel’s ad as “noncommercial” speech protected by the First Amendment, the Seventh Circuit reversed and remanded the matter for further consideration.

“In short, the ad’s commercial nature is readily apparent. It may be generic and implicit, but it is nonetheless clear,” Judge Diane Sykes wrote for the panel. “The ad is a form of image advertising aimed at promoting goodwill for the Jewel-Osco brand by exploiting public affection for Jordan at an auspicious moment in his career.”

The full-page ad at the crux of the case ran on the inside, back cover of the magazine’s special issue, which included content and photos showcasing Jordan’s career to commemorate his September 2009 induction into the Basketball Hall of Fame.

Jewel was given free ad space in the issue in exchange for stocking the magazine in its stores, according to the opinion that notes Dominick’s ran a full-page ad in the same issue. Jordan’s suit against the now-shuttered grocery store chain remains pending.

Designed by its marketing department, Jewel’s ad featured a photo of a pair of basketball shoes--each of which had “23” on its tongue in a nod to the number Jordan wore-- below Jewel’s trademarked logo and “Good things are just around the corner” slogan.

Text at the top of the ad read: “A Shoe In! After six NBA championships, scores of rewritten record books and numerous buzzer beaters, Michael Jordan’s elevation in the Basketball Hall of Fame was never in doubt! Jewel-Osco salutes #23 on his many accomplishments as we honor a fellow Chicagoan who was ‘just around the corner’ for so many years.”

Shortly after the issue hit the shelves of newsstands, Jordan filed suit in circuit court, claiming Jewel was using his identity for its own commercial benefit. His suit accused the grocery store chain of unfair competition and violations of federal trademark Lanham Act, the Illinois Right of Publicity Act and the state’s deceptive practices statute.

Jewel removed the matter to federal court and moved for summary judgment following discovery, arguing that its ad qualified as noncommercial speech and was therefore, protected by the First Amendment.

Jordan, according to the panel’s opinion, disagreed, claiming that the ad “is garden-variety commercial speech, which gets reduced constitutional protection and may give rise to liability for the private wrongs he alleges in this case.”

The district court judge sided with Jewel, finding that it was protected by the First Amendment because the ad fell under the parameters of noncommercial speech. Jordan appealed.

In its 26-page opinion, the Seventh Circuit reversed the lower court ruling after determining Jewel’s ad was indeed commercial speech.

Although Jewel “creatively and conspicuously linked” its logo and slogan “to Jordan in the context of the ad’s congratulatory message,” the panel found that “based on its content and context, the ad is properly classified as a form of image advertising aimed at promoting the Jewel-Osco brand.”

In its analysis, the Seventh Circuit explains that because Jordan’s career achievements have allowed him “to reap the economic value of his reputation in the history of the game, he understandably guards the use of his identity very closely,” something the federal Lanham Act and Illinois Right of Publicity Act allow him to do.

Saying that the law in the area of free speech is more complicated than what the parties laid out,  the panel’s opinion states “The Supreme Court has generally worked out its commercial-speech doctrine in public-law cases” by determining the standard of scrutiny to apply by deciding whether the speech at issue is commercial or non-commercial.

“This is not a public-law case; it’s a clash of private rights,” Sykes wrote for the panel in regards to Jordan’s case.“Even if Jewel’s ad qualifies as noncommercial speech, it’s far from clear that Jordan’s trademark and right-of-publicity claims fail without further ado.”

The panel further notes that there isn’t “judicial consensus on how to resolve conflicts between intellectual property rights and free-speech rights” and that “The Supreme Court has not addressed the question, and decisions from the lower courts are a conflicting mix of balancing tests and frameworks borrowed from other areas of free-speech doctrine.”

But, Sykes wrote for the federal appeals panel, “Jordan’s litigating position allows us to sidestep this complexity.”

Jordan had agreed with Jewel’s position that if the court determined the ad was noncommercial speech, then the First Amendment would provide a complete defense to all of his claims.

“We’re not sure that’s right, but for now we simply note the issue and leave it for another day,” Sykes wrote for the panel.

In reversing the lower court, the Seventh Circuit rejected the grocery store chain’s argument that its ad was noncommercial speech because it didn’t actually propose a commercial transaction.

“It’s clear that the textual focus of Jewel’s ad is a congratulatory salute to Jordan on his induction into the Hall of Fame,” Sykes wrote. “If the literal import of the words were all that mattered, this celebratory tribute would be noncommercial.”

“But,” she added, “evaluating the text requires consideration of its context, and this truism has special force when applying the commercial-speech doctrine. Modern commercial advertising is enormously varied in form and style.”

She explained that an ad promoting brand awareness and loyalty is “no less ‘commercial’” than one that “explicitly” proposes a transaction.

Jewel’s ad, the opinion states, served two goals: to congratulate Jordan and to promote the grocery store chain.

While the first goal was apparent, the panel held that “considered in context, and without the rose-colored glasses, Jewel’s ad has an unmistakable commercial function: enhancing the Jewel-Osco brad in the minds of consumers. This commercial message is implicit, but easily inferred, and is the dominant one.”

The panel also makes note of a point Jewel raised in trying to bolster its noncommercial speech argument by saying it has a longstanding, corporate practice of commending local community groups on achievements.

“There is a world of difference between an ad congratulating a local community group and an ad congratulating a famous athlete,” Sykes wrote. “Both ads will generate goodwill for the advertiser. But an ad congratulating a famous athlete can only be understood as a promotional device for the advertiser.”

She added, “Unlike a community group, the athlete needs no gratuitous promotion and his identity has commercial value. Jewel’s ad cannot be construed as a benevolent act of good corporate citizenship.”

And in case anyone is unfamiliar with Jordan, Sykes included a footnote in the opinion stating, “Jordan, of course, is the superstar former Chicago Bulls basketball player. During his fabled career, Jordan led the Bulls to six [NBA] championships, winning myriad awards and countless accolades as the best player in the game.”

Sykes was joined on the panel in this case by Judge Joel Flaum and U.S. District Judge Rudolph Randa in Wisconsin, who sat on the panel by designation.

Attorney Frederick J. Sperling of Schiff Hardin in Chicago represented Jordan in arguments before the Seventh Circuit, where Minnesota attorney Rachel K. Zimmerman represented Jewel.

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