The lawsuit between Trek Bicycle and Greg LeMond is rolling, slowly, toward the courtroom and what could be an explosive trial. A federal judge in Minnesota last week rejected requests from each side to dismiss the case, and granted each an assortment of minor victories and setbacks.
Both sides are trying to end a licensing agreement between the three-time Tour de France winner and the Wisconsin-based bike maker. Each claims the other breached aspects of the agreement. Trek announced in early 2008 that it was discontinuing the line.
The case raises the specter of a trial in which LeMond might attempt to show that his publicly expressed concerns about the purity of Lance Armstrong’s Tour victories have some foundation. Trek has charged that LeMond’s remarks violated the 1995 Trek-LeMond licensing agreement, which forbade LeMond from taking “any action” that might damage Trek, a key Armstrong sponsor.
LeMond’s legal team said in pre-trial motions that his comments were “words,” not actions. And while neither side disputes a decline in sales of LeMond bikes, LeMond said there was no evidence that his comments caused the decline.
However, U.S. District Judge Richard Kyle, in an opinion released Friday, said a jury will have to decide.
“A jury could reasonably infer, depending on how the evidence unfolds at trial, that the LeMond brand’s lack of growth was caused by LeMond’s statements,” Kyle wrote, in rejecting LeMond’s request to summarily dismiss that aspect of Trek’s suit.
While the rejection of LeMond’s request might be considered a victory for Trek, allowing this part of the case to continue might give LeMond an opportunity to bring his claims against Armstrong into a courtroom, something Trek would likely not welcome.
Stage wins and losses
If the ultimate trial verdict may be considered a general classification race, each side won a few stages, or at least intermediate sprints, in Kyle’s opinion. Here’s a quick play-by-play:
LeMond scored when Kyle rejected two parts of Trek’s claim that he violated the licensing agreement.
PTI agreement: Trek had claimed that LeMond violated the agreement by making a sublicensing agreement with bicycle accessory maker PTI. While the original contract allowed sublicensing, Trek said that the action harmed its ability to sell Trek bikes, because PTI sells low-priced accessories through mass merchant retailers. But Kyle, noting that the contract did not specifically forbid LeMond from sublicensing his name to a mass merchant supplier, rejected this part of Trek’s case.
Bro’ deal bikes: Trek also said LeMond violated the agreement by buying $2.5 million worth of LeMond bikes at employee-discount pricing, and using the bikes to barter for goods and services or to sell. But Kyle said that if Trek had a problem with LeMond’s actions, the company shouldn’t have sold and shipped him the bikes over the course of 13 years.
“(E)ven if LeMond’s use of the free and employee-priced bicycles constitutes a breach of contract, such a breach has been waived,” Kyle wrote. “Trek processed each of LeMond’s bicycle orders and has never previously asserted a breach of the Sublicense Agreement resulting from these orders.”
“Best efforts”: Trek also had asked the court to throw out LeMond’s claims that Trek failed to make “best efforts” to promote the LeMond Bicycle brand. Kyle rejected the request, saying that a jury will have to decide if Trek fulfilled that part of the contract.
Free bikes: LeMond got nowhere with his claim that Trek violated the agreement by failing to give him six free bikes a year, a contract stipulation that was later raised to 15 bikes a year. LeMond said he didn’t get all the free bikes he had coming to him. But Kyle noted that LeMond didn’t request them every year. “(The contract) unambiguously provides that LeMond is entitled to the requisite amount of free bicycles each contractual year. … By not requesting such bicycles within the contractual year, LeMond knowingly waived his right to such bicycles.”
New line and travel: LeMond had initially asserted that Trek violated the contract by developing a new road bike line similar to the LeMond line, by failing to reimburse LeMond for travel to some events, and by failing to invite him to others. Trek asked that these claims be dismissed, and since LeMond did not respond to the motion, Kyle granted the motion.