Source: MSCHF
By: Caldwell
As a leader in branding, fashion, and commerce, Nike has often found itself embroiled in trademark related legal disputes. So, it should come as no surprise that the company filed a lawsuit on March 29, 2021 against the Brooklyn-based art and design collective MSCHF for their collaboration with Lil Nas X on the “Satan Shoe,” a modified Nike shoe.
Modification of Goods and Consumer Confusion
MSCHF purchased 666 individual pairs of Nike Air Max 97 shoes and then modified or altered them drastically enough to sell them by the name “Satan Shoes.” The modifications included 60CC of red ink and one drop of human blood, a red, upside down cross embroidered on the tongue, red embroidery on the side of the shoe of the number 6/666, a circular pendant with a pentagram attached to the shoelaces, and a reference to the Bible verse Luke 10:18 describing Satan falling like lightening from heaven. Only 666 pairs of the shoes were available for sale, at the “Luke” price of $1,018.
Nike’s complaint alleges that, on the heels of the release of the Satan shoe and about six hours after the release, “[T]here is already evidence of significant confusion and dilution occurring in the marketplace, including calls to boycott Nike in response to the launch of MSCHF’s Satan Shoes based on the mistaken belief that Nike has authorized or approved this product. … In the short time since the announcement of the Satan Shoes, Nike has suffered significant harm to its goodwill, including among consumers who believe that Nike is endorsing satanism.” Nike responded to the public shock and apparent confusion alluded to above in a statement to The New York Times and The Independent, saying, “We do not have a relationship with Little Nas X or MSCHF. Nike did not design or release these shoes, and we do not endorse them.”[i]
Nike’s Claims of Trademark Infringement, Dilution, False Designation of Origin, and Unfair Competition
Nike’s lawsuit regarding the Satan Shoe charges MSCHF with “trademark infringement and dilution, false designation of origin, and unfair competition.” The complaint claims that MSCHF bought the Nike shoes and customized them such that they were “materially altered to prominently feature a satanic theme … without Nike’s approval or authorization.” Nike further alleges that in so doing, MSCHF intentionally caused “deception as to the source of origin or relationship of Nike’s products and MSCHF’s Satan Shoes, and has otherwise competed unfairly by unlawfully trading on and using Nike’s [marks] without Nike’s permission… MSCHF’s unauthorized use of Nike’s [marks] and/or confusingly similar marks constitutes a false designation of origin that is likely to cause consumer confusion, mistake, or deception as to the origin, sponsorship, or approval of MSCHF and/or MSCHF’s Satan Shoes by creating the false and misleading impression that MSCHF’s Satan Shoes are manufactured by, authorized by, or otherwise associated with Nike.”
Nike asserts in the complaint that “[u]nless stopped, MSCHF’s Satan Shoes and MSCHF’s use of Nike’s [marks] will continue to cause confusion in the marketplace, including but not limited to initial interest confusion, post-sale confusion, confusion in the secondary sneakers markets, and dilution by blurring and tarnishment… MSCHF’s wrongful use of the Nike [marks] is likely to cause dilution by blurring and the whittling away of the distinctiveness and fame of the Nike [marks]. In addition, MSCHF’s wrongful use of the Nike [marks] in connection with satanic imagery is likely to cause dilution by tarnishment.”
Additionally, Nike states “[Modifying the shoes] was done without Nike’s approval or authorization, and Nike is in no way connected with this project,” the court filing reads.
The lawsuit also requested a temporary restraining order (“TRO”) and an injunction to bar MSCHF from “manufacturing, transporting, promoting, advertising, publicizing, distributing, offering for sale, or selling any products (including but not limited to the Satan Shoes) under Nike’s marks, [and/or] any marks substantially indistinguishable therefrom.”
MSCHF responded that the temporary restraining order was not needed because it had already shipped 665 of the 666 pairs of shoes. Nike argued that without a TRO followed by an injunction, it would suffer irreparable harm. Daniel Greenberg, Director of Strategy and a founding member of MSCHF has also told Input Magazine that the company used the Nike shoes as a canvas for its creations, perhaps indicating a possible line of defense that MSCHF might have pursued, had the case not settled.
Source: Getty Images, Unsplash
Trademark Owners’ Responsibility to Police Their Marks and MSCHF’s Previously Released Jesus Shoe
Trademark owners should police their marks and take action against infringers so as not to waive rights to future enforcement against the same company. MSCHF had previously released a pair of “Jesus Shoes,” again using the Nike Air Max 97 shoe, back in 2019. The Jesus Shoe was filled with holy water from the Jordan River instead of red ink and human blood, like the Satan shoe. The Jesus Shoe brought Nike positive attention and good press. Just like the Satan Shoe, Nike had no involvement in the creation and endorsement of the Jesus shoe. However, Nike did not take legal action against MSCHF for the Jesus shoe at the time of its release. Knowing this might come up in MSCHF’s defense, Nike addressed it in a letter to the judge, citing cases in which a trademark plaintiff “has no obligation to sue until the likelihood of confusion looms large,” and that the reason it did not sue MSCHF at the time was because it was a “smaller release that attracted little attention and was not one that associated Nike’s brand with as charged a topic as Satanism.” Nike also noted it did not “[rule] out pursuing relief related to the Jesus Shoe…”[ii]
How Nike Weaved Action Addressing the Jesus Shoe Into This Case
The parties settled the lawsuit on April 8, 2021. While most of the details of the settlement remain confidential, a representative for Nike told Yahoo Finance that it “asked MSCHF to initiate a voluntary recall to buy back any Satan Shoes and Jesus Shoes for their original retail prices, in order to remove them from circulation.” Nike made sure to include the Jesus Shoe in this recall, so as to avoid MSCHF potentially asserting the defense of laches, where a plaintiff who waits too long to assert a right, thereby waives such rights.[iii]
Here is Nike’s full statement regarding the settlement, as obtained by The Hollywood Reporter:
On March 29th, Nike filed a lawsuit against MSCHF over its release of Satan Shoes, which used a Nike Air Max 97 as the base. MSCHF also previously released Jesus Shoes, which used a Nike Air Max 97 as the base. In both cases, MSCHF altered these shoes without Nike’s authorization. Nike had nothing to do with the Satan Shoes or the Jesus Shoes.
Today, April 8th, Nike and MSCHF have agreed to settle the lawsuit.
As part of the settlement, Nike has asked MSCHF, and MSCHF has agreed, to initiate a voluntary recall to buy back any Satan Shoes and Jesus Shoes for their original retail prices, in order to remove them from circulation.
If any purchasers were confused, or if they otherwise want to return their shoes, they may do so for a full refund. Purchasers who choose not to return their shoes and later encounter a product issue, defect, or health concern should contact MSCHF, not Nike.
The parties are pleased to put this dispute behind them.
Strategic Considerations in Trademark Policing and Enforcement
As the Nike case shows, trademark strategy does not end at registration. In fact, registration is where the in-depth strategic planning begins. Trademark owners have a duty to police their marks and accordingly make strategic decisions regarding when to act against an infringer, and when to hold off on enforcement. Nike took the risk of losing its ability to enforce its mark against subsequent infringement when it allowed the Jesus Shoe be sold without taking legal action because that particular sale was not harming the brand; whether good or bad, this was a strategic decision. It was also a strategic decision to make sure the Jesus Shoe was included in the Satan Shoe case settlement. Decisions such as these should be contemplated with the support of experienced attorneys.
[i] https://caldwelllaw.com/app/uploads/2021/04/NIKE-vs-MSCHF.pdf
[ii] https://www.thefashionlaw.com/nike-inc-v-mschf-product-studio-inc-nike-letter/
[iii] https://finance.yahoo.com/news/nike-and-mschf-agree-to-settle-lawsuit-over-satan-shoes-204133991.html