The Satan Shoe Case: An Analysis of the Trademark Tussle between Nike and MSCHF

27th September, 2021 - 12:19 pm Categories: Legal Issues 0 Comments

Commerce, fashion and branding giant Nike got into a trademark tussle yet again as recently as five months ago when Nike sued Brooklyn based MSCHF Product Studio Inc. over its latest launch of the Satan Shoes in collaboration with the Atlanta based artist “L’il Nas X” over his recent release of “MONTERO (Call me by your name)”.

It is not new to customize an existing artwork into something new. Roman leaders did such customizations to authenticate coins and military creations. “MSCHF” is a collective of artists and “designers” which creates novel and unique products and giving them an altogether new feel. For example, they have all the episodes of the all-time sitcom classic ‘The Office’ in a slack version available for sale, they sold a PC with a bug installed in it for $1.35 million, a browser extension that lets you Netflix while appearing on a work call etc. Moreover, MSCHF Inc. recently launched the Satan Shoes and Jesus Shoes for online sale.

On 29^th March, 2021, MSCHF released 666 pairs of Satan Shoes which were NIKE AIR MAX 97 (purposefully bought and sold, as the number is suggestive). The modifications of the shoe included ‘injecting 60CC of red ink into the mid-sole with “a drop of blood” in every shoe’, ‘upside down cross embedded on the tongue of each shoe’, ‘red embroidery of 6/666 on the side of show’, a ‘circular pendant’ with a ‘satanic pentagram’ attached over the ‘shoe laces’ and a reference to a verse from the Bible, viz. ‘LUKE 10:18, describing Satan falling like lightning from heaven.’ The pair was priced at $1,018 amounting to 75,700 INR.

The Satan shoe being the successor of the earlier release, MSCHF’s 2019 “Jesus Shoe(s)”, 24 pairs of which were made, originally store bought white colored Nike AIR MAX 97. They had a significant amount of holy water from the river Jordan (in the place of blood ink in Satan Shoe), the Nike Swoosh, a “Gold Plated Cross” blessed by a priest from Brooklyn, New York City and had the biblical reference –MATTHEW 14:25, which described “Jesus walking on water towards his disciples who fearfully misunderstood him for a spirit”. This piece of innovation was priced at $1425 (1 lakh INR) and sold at an auction for $4000 (approx. 3 lakh INR).

Legal Tussle

Affected by the aforementioned conundrum, Nike filed a Trademark Infringement suit in a United States district Court. Nike, through continuous sales, promotional activity & goodwill has strengthened its trademark rights and assets which include the NIKE word mark and the ‘Swoosh’ mark.

Nike contended the following:

• “Trademark Infringement in violation of obtaining the Prior Consent of the registrant to reproduce, counterfeit, copy or imitate a registered trademark for the purpose of sale, offering for sale, distribution or advertisement of goods & services, so that it does not cause confusion/deception.” Nike claimed having no control over the nature and quality of the ‘Satan shoes’ offered by MSCHF and Nike’s goodwill would be tarnished by the use of its Asserted Marks over this shoe.
• “False Designation of Origin/Unfair Competition in Violation by the use of any word, term, name, symbol or device or false designation of origin or misleading representation or misrepresents the nature/geographical indication of a fact such that there is a likelihood to cause confusion/deception as to association/connection with another person’s goods, services or any commercial activity thereof.” Nike also claimed that as a direct and proximate result of MSCHF’s wrongful acts, “it has suffered damage to its trademarks, business reputation and goodwill and claims remedies as the Nike’s trademarks are registered and entitled to protection under the US federal and common law.”
• “Trademark Dilution in Violation of false designations of origin and false description or representation as MSCHF’s use of Nike Asserted Marks or confusingly similar marks has caused and continues to cause irreparable injury to and the dilution of the distinctive quality of Nike Asserted Marks in violation of Nike’s Trademark rights.”
• “Common Law Trademark infringement and Unfair Competition” as MSCHF’s use of Nike’s Asserted Marks or any confusing similar marks has been willful and intentional. MSCHF’s bad faith is evidenced at least by the similarity of MSCHF’s Satan Shoes to Nike’s Asserted Marks and the extent of infringement.

MSCHF in its defense, brought in the ‘First Sale Doctrine’, which states that there is no trademark infringement if an individual resells a trademarked item after he purchases the same through authorized means from the trademark owner, even if the individual does not have permission from the trademark owner for subsequent sale. This legal principle did not comply with the given circumstances as the modifications made the said shoe lose its originality, which in this case meant that the shoes gave an impression that they were a product of NIKE rather than MSCHF Product Studio Inc.

NIKE prayed for “a permanent injunction order pertaining to manufacturing, transporting, promoting, advertising, publicizing, distributing or selling of Satan shoes bearing Nike’s well established ‘Swoosh’ trademark”; for an order to deliver all the 666 pairs of the product to ‘Nike for destruction’; for an order of damages suffered during the trial proceedings; for an order of profits collected by MSCHF on sale of the ‘Satan Shoes’; “for statutory and additional damages including costs, expenses and attorney fees.”

The judges had to ‘examine whether the use of the mark has artistic relevance’, and if so, whether the work is explicitly misleading. The response was that the black and red, devil themed sneakers carrying the Nike ‘Swoosh’ logo, had infringed the Nike trademarks. The judge took out a restraining order telling MSCHF to recall all of its 666 pairs of ‘Satan Shoes’ and to provide the returnee a complete reimbursement on the same. This Nike-MSCHF case is a perfect example creating a diversion between traditionalists and the progressivists as regards to the modern-day acceptability norms.

Author: Aniruddha Mishra – a student of Hidayatullah National Law University, currently an intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at vidushi@khuranaandkhurana.com.