This post first appeared on the SLT website at www.sportslawandtaxation.com and is reproduced with the kind permission of the owners of this website.
On 29 March 2021, MSCHF Product Studio, Inc. (MSCHF) released 666 pairs of Nike Air Max 97 shoes, in collaboration with rapper Lil Nas X.
These shoes were modified to include red ink and a drop of human blood inside the shoe’s midsole; red embroidered detailing on the back and side of the shoes a circular pendant of a pentagram attached to the laces; and a red insole printed with a black pentagram – so-called Satan Shoes.
On the same day, Nike, Inc. (Nike) filed a US trademark dilution and infringement, unfair competition and false designation of origin lawsuit against MSCHF, alleging that MSCHF released the Satan Shoes, without the approval or authorization of Nike and are trying to capitalise on the valuable reputation and goodwill of Nike.
As one of the most famous trademarks in the world, the Nike Swoosh is at the centre of its brand. Despite the drastic modifications, the Satan Shoes still prominently display the Nike Swoosh on the side and tongue of the shoes.
Nike claims that this has caused significant confusion and dilution to consumers within the market. In its complaint, Nike included evidence of the backlash it has received online following the release of the Satan Shoes. Comments posted on social media show users stating that they are “never buying a Nike shoe again!” and calls for the company to be “cancelled”.
Nike is seeking an injunction, monetary damages and an order for MSCHF to deliver up all items in the possession of MSCHF that bear the Nike trademarks, especially the famous Nike ‘Swoosh’.
Whilst it is clear that there is weight behind the Nike claim, the vigour with which Nike has already pursued its claim against MSCHF could create some PR challenges for the company.
Companies considering making equivalent intellectual property claims in the UK and EU – in the UK, we refer to ‘passing off’ claims, rather than unfair competition – should consider the commercial consequences that often come with intellectual property claims of this kind.
The US Court did, however, grant Nike a temporary injunction, on 31 March, to restrain MSCHF from fulfilling orders of the Satan Shoes. MSCHF claimed that it had already shipped out almost all of the shoes and, so far, no order has been made by the Court to recall them.
MSCHF does not appear to be backing down and, if the case proceeds to trial, MSCHF may rely on defences such as parody. This would require MSCHF to convince the Court that the Satan Shoes are a humorous or satirical take on Nike or its trademarks.
MSCHF have already stated that the shoes are intended to be satirical and reflect on how “brands like Nike collaborate with anyone willing to make a splash”, so it would appear they are thinking about this line of argument.
Although parody is not a defence against trademark infringements in the UK or EU, it will be very interesting to see whether MSCHF can successfully establish this defence and demonstrate that consumers were not confused by their Satan Shoes.
