What are your thoughts on this copyright/licensing issue?

Okay, first let me start by saying I'm fairly familiar with the law. I've had to be at my numerous positions over the years. Saying that, the law can be tricky so I want to get some opinions. Not necessarily legal advice, unless someone can point me to something that handles this type of situation. Situation follows:

The situation:

 

 

Lets say Nike (I don't think this is Nike's but I'm using them as an example) has created and printed the above design. Now obviously this has a few licensed marks within the design. The phrases 'Big Ten' and 'Ohio State Buckeyes' are both registered trademarks as well as the logos beginning used for both the Big Ten and Ohio State. Does Nike have the ability to claim copyright on the design as a whole to avoid other companies from printing the exact same design or is that not possible due to the inclusion of these trademarked phrases/logos?

The arguments:

I personally feel that Nike can/should be able to claim copyright to the design as a whole in order to protect their motif/design. They would not be able to print this without it being licensed thru the university, however they could be able to go after anyone who printed this since they claim copyright.

On the flip side, my employer says that Nike cannot claim copyright on this because it includes these trademarks. Therefore our company sees nothing wrong in duplicating anything anyone else has done as long as it has licensed trademarks within the design and we get it licensed thru the university. I'm not sure how the law handles this but I personally see it as wrong.

The law:

Currently section 202.10 of Title 37 of copyright law states the following:

Title 37, 202.10 said:
202.10 - Pictorial, graphic, and sculptural works.

(a) In order to be acceptable as a pictorial, graphic, or sculptural work, the work must embody some creative authorship in its delineation or form. The registrability of such a work is not affected by the intention of the author as to the use of the work or the number of copies reproduced. The availability of protection or grant of protection under the law for a utility or design patent will not affect the registrability of a claim in an original work of pictorial, graphic, or sculptural authorship.

(b) A claim to copyright cannot be registered in a print or label consisting solely of trademark subject matter and lacking copyrightable matter. While the Copyright Office will not investigate whether the matter has been or can be registered at the Patent and Trademark Office, it will register a properly filed copyright claim in a print or label that contains the requisite qualifications for copyright even though there is a trademark on it. However, registration of a claim to copyright does not give the claimant rights available by trademark registrations at the Patent and Trademark Office.

As you see that 'A claim to copyright cannot be registered in a print or label consisting solely of trademark subject matter and lacking copyrightable matter.' in the first line of (b).

What are your thoughts on this interpretation of this line?

'A claim to copyright CAN be registered in a print or label consisting of SOME trademark subject matter and CONTAINING copyrightable matter.'

This would basically cover the design above as being able to be claimed as copyright, right? Since it contains some trademark subject matter however also contains more graphics/design elements that could be claimed as copyright on their own.

What are some thoughts on this and if anyone could help clarify this, that would be great. Maybe some of you have ran into this type of situation in your careers and would love to hear what might be the legal solution to the situation.

Until then I'm the one designer here that refuses to exactly duplicate anyone else's printed designs. I'd love to say I'm correct on this, if not legally, at least morally.

Thanks guys.