29 November 2018Trademarks

Jay-Z cites racial bias in bid to halt TM case

US rapper Jay-Z has claimed that there aren’t enough African-Americans to hear arbitration of a trademark dispute with brand management company Iconix Brand Group, in a bid to stop the case.

According to the petition, which was filed yesterday, November 28, at the Supreme Court of New York, the lack of racial diversity among arbitrators at the American Arbitration Association (AAA) is discriminatory under New York’s state constitution and a New York City human rights law.

In 2007, Iconix acquired the ‘Roc Nation’ trademark in class 25 and IP rights from Rocawear Licensing for $204 million.

Disputes arose between the parties over a series of transactions, leading to a settlement agreement in 2015 which stipulated that future claims would be addressed by arbitration, according to the petition.

But, in April 2017, Iconic sued Jay-Z at the US District Court for the Southern District of New York, accusing the rapper and his companies of trademark infringement. Later that year, Jay-Z and his companies including Roc Nation countersued for breach of licence.

Separately, Iconix commenced arbitration proceedings against Jay-Z in October this year in the state court, claiming that Jay-Z had breached certain obligations under the settlement agreement.

The arbitration action was “presumably seeking to put pressure on certain parties—who are also defendants in Iconix’s trademark action—by suddenly demanding financial information about the businesses that they had not received in the ordinary course of performance”, according to Jay-Z’s petition.

Now, Jay-Z is seeking to stay the arbitration.

When Jay-Z began reviewing arbitrators on the AAA’s search platform, he was “confronted with a stark reality” that he couldn’t identify a single African-American arbitrator that had the background and experience to preside over the arbitration, said the petition.

When confronted, the AAA was allegedly only able to provide three potential African-American arbitrators, but one had already represented Iconix in related litigation.

In the petition, Jay-Z claimed that the lack of African-American arbitrators came as a surprise.

“This blatant failure of the AAA to ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory arbitration provisions in commercial contracts across nearly all industries,” he said.

The rapper claimed that the AAA’s failure to provide a selection of arbitrators that includes more than a “token number” of African-Americans renders the arbitration provision void as it is against public policy.

Jay-Z has also asked the court to stay the arbitration for a minimum of 90 days, so that he can work with the AAA to include sufficient African-American arbitrators from which the parties may choose.

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