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A recent Nike trademark dispute between the company and MSCHF Product Studio, Inc. garnered a considerable amount of attention. It also brings to light several crucial trademark litigation lessons. Notably, the litigation demonstrates the importance of a company's willingness to protect its brand, even against a much smaller outfit.
The lawsuit, which was filed in the U.S. District Court for the Eastern District of New York, arose from the production of shoes made in collaboration between the Brooklyn-based art collective and rapper, Lil Nas. Referred to as "Satan Shoes," the designer modified 666 pairs of black and red Nike sneakers with demon iconography, and purportedly, a "drop of human blood." The $1,018 shoes were not approved or authorized by Nike and resulted in backlash on social media with calls to boycott Nike. Trademark infringement litigation quickly followed.
In the complaint, Nike asserted claims of trademark dilution and likelihood of confusion regarding the altered shoes that used Nike Air Max 97 as the base. Nike also argued that the "Satan Shoes" caused consumers to erroneously associate Nike's products with the controversial shoes, causing damage to the athletic footwear giant.
Nike, which said it had nothing to do with the promotion, marketing, or production of the subject shoes, provided the court with evidence of conversations on social media to support its claim of dilution. The evidence demonstrated that many people were of the mistaken belief that Nike had endorsed the shoes and were accordingly repulsed with the company. In other words, Nike's reputation had been tarnished by the infringement.
Nike requested a restraining order barring any further sale of the shoes, which the judge granted. In addition, a settlement was reached in the trademark infringement lawsuit between Nike and MSCHF. While the settlement details have not been disclosed, MSCHF has agreed to buy back any shoes purchased by consumers who may have been confused by the origins for a full refund.
The "First Sale Doctrine" is a common defense to trademark infringement actions. Effectively, it means that the holder of a trademark has the exclusive right to sell goods that feature the mark. However, under the doctrine, trademark owners cannot restrict any further sale by asserting a claim of infringement. In other words, if a product is resold by someone other than the trademark owner, there are no grounds for a trademark infringement action.
In the case of the "Satan Shoes," the First Sale Doctrine could not likely be used as a viable defense because the Nike shoes were "materially altered" from their original form. Rather than appearing as the same product created by Nike and with the Nike trademark, the modified shoes featured a pentagram, a Bible reference, and supposedly, human blood injected into the midsole. While the case settled before the court could address the question of whether material alteration occurred, it seems likely that the changes made to the sneakers would have been deemed such by the court.
Another critical takeaway from the litigation is the interplay between trademark law and freedom of expression under the First Amendment. In the Nike trademark case, the parties settled before the court could address MSCHF's First Amendment argument raised in its defense. Nevertheless, it is vital for trademark owners to be aware of how courts weigh avoiding the likelihood of consumer confusion with First Amendment protections.
The Second Circuit set forth a balancing test in Rogers v. Grimaldi which has become long-standing precedent in the jurisdiction. While some level of consumer confusion is permissible under the Lanham Act to not interfere with free speech, the court held that "the likelihood of confusion must be particularly compelling to outweigh the First Amendment interest recognized in Rogers." Specifically, artistic relevance and whether a mark's use is "explicitly misleading" are two factors that a court will generally consider in determining whether a defendant could prevail by using a First Amendment argument.
The factor "explicitly misleading" requires a plaintiff to demonstrate that a consumer would be misled as to the source of the work. This is a much higher burden to meet than showing a "likelihood of confusion." To prove that the work is "explicitly misleading," some courts require a showing of misstatements overtly or expressly made by the infringer, rather than simply their use of the trademark.
Your trademark represents your company's reputation, goodwill, and identity. If your mark has been misused or infringed upon by another, it is essential to take action to protect the brand you worked so hard to build. Located in Ann Arbor, Michigan, the Trademark Lawyer Law Firm, PLLC offers skilled advocacy and experienced representation for trademark infringement litigation and a wide variety of trademark matters. With over 6,000 trademarks successfully registered with the USPTO to our name, we are committed to providing high-quality legal services and personalized attention. Contact us today to schedule a free 15-minute consultation.
Suspensions are when your application is on hold. There are various reasons a trademark application can be suspended. However “likelihood of confusion” with prior application(s) filed and submission of foreign application are the most common reasons the USPTO may suspend an application. During a trademark suspension period, your lawyer will provide guidance on the next steps and whether it might be best to file an argument or pursue a coexistence agreement.
A disclaimer usually refers to a statement which indicates that you are not claiming exclusive rights to use the word(s) or a design element in your trademark application. A disclaimer allows for registration without creating a false impression of the registrant’s rights.
A good example of this is disclaiming “café” if your services are for a café.
If a trademark is not eligible for the Principal Registry, there is sometimes an option to register on the Supplemental Registry.
In cases where the USPTO finds the trademark application is merely ornamental, merely descriptive, or primarily geographically descriptive, the USPTO may allow the application to be registered on the Supplemental Registry. However, over time, the mark may acquire distinctiveness and possibly become eligible for the Principal Registry.
Two dates must be specified in a trademark application:
Date of First Use Anywhere: The “anywhere” refers to use in the U.S. or elsewhere. This is the date the goods were first sold or transported, or the services were first rendered under the mark. The use must also have been bona fide and in the ordinary course of trade.
Date of First Use in Commerce: This is the date when the goods were first sold or transported, or the services were first rendered under the mark in interstate or international commerce. The use of the mark must have been bona fide and in the ordinary course of trade.
The renewal timeframe for a trademark is between the 9th and 10th year anniversary of the trademark registration, and then in ten-year intervals. It is important to be aware that the USPTO also requires a registrant to provide an affidavit at the 5th and 6th years of ownership stating that the trademark is still being used in commerce. Failure to comply with the renewal timeframes or the affidavit requirements will result in the cancellation of the trademark registration.
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