Trademark Litigation Lessons from Nike-Lil Nas X “Satan Shoes” Fight

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.

What Did Nike Argue in the Lawsuit?

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.

Does the First Sale Doctrine Apply in the Nike Trademark Dispute?

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.

Likelihood of Consumer Confusion Versus Free Expression

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.

Contact a Skilled Trademark Litigation Attorney

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.