As the saying goes, the devil is in the details, and this seem to be just the case. On March 29, 2021, the American art collective MSCHF Product Studio announced it was dropping 666 pairs of what it called “Satan Shoes.” The shoes are an altered version of the Nike Air Max 97, and MSCHF produced them in collaboration with the American rapper Lil Nas X. The Satan Shoes differ from a pair of genuine Nike Air Max 97, even if both share the same design and display the famous Nike “Swoosh” logo. The Satan Shoes come with a pentagram charm on the laces and have “Luke 10:18” (a reference to a Bible passage about the devil) written on the side. Their soles are filled with 66 cubic centimeters of red ink and (allegedly) one drop of human blood.
ANALYSIS OF THE CASE
Nike and MSCHF officially declared that the former was not involved in this process in any capacity, but the launch of the shoes generated widespread confusion, not to mention scandal. Some conservatives and religious followers (including South Dakota governor Kristi Noem) took offense at the controversial design of the shoes and criticized Lil Nas X and MSCHF on Twitter. Thus, Oregon-based company Nike decided to take a stand by filing an action before the U.S. District Court for the Eastern District of New York for trademark infringement against MSCHF “to maintain control of its brand, to protect its intellectual property, and to clear the confusion and dilution in the marketplace.”[1]
In its complaint, Nike argued that the use by MSCHF of Nike’s own (or confusingly similar) trademarks F on the Satan Shoes amounted to trademark infringement. To support this claim, the plaintiff must prove that it holds a valid mark that has priority over the defendant’s, and that the latter is such to create confusion in the minds of consumers about the origin of the products bearing the contested sign.
Nike’s prior ownership of the “Nike” word mark and the “Swoosh” figurative mark is undisputed. As to the second requirement—according to Nike—the unauthorized use of the enforced trademarks is likely to mislead consumers into thinking the product is attributable to Nike or to deceive them as to the existence of a relationship between Nike and MSCHF. As to this point, Nike stated, “There is already evidence of significant confusion and dilution occurring in the marketplace, including calls to boycott Nike”[2] due to the launch of the Satan Shoes. To back up these allegations, the plaintiff even included screenshots of users asserting on social media that they “never want to purchase any Nike products in the future.”[3] As a result, the leading sportswear company maintained that the initiative by MSCHF caused significant harm to its trademarks, business reputation, and goodwill; consequently, Nike demanded compensation for the damages suffered.
In its complaint, Nike also claimed trademark dilution; specifically, dilution forbids the use of a famous trademark by others (non-competing businesses included) in any manner that might lessen the uniqueness of the mark. In the case at stake, Nike maintained that the use of its famous “Swoosh” logo in connection with satanic imagery is likely to cause dilution by tarnishment, as it harms Nike’s reputation. Moreover, Nike also argued that “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.”[4] On all these grounds, Nike also requested that the court issue an interim injunction to stop MSCHF immediately from selling the Satan Shoes.
Opposing this request, MSCHF argued that there is no threat of immediate harm that justifies such relief.[5] But the art collective also contested Nike’s likelihood of success on the merits. First, it held that its product is not a commercial one, but an intellectual work, and thus is protected under the First Amendment—even if it used Nike’s trademarks. Indeed, MSCHF’s project with Lil Nas X is allegedly intended to criticize the phenomenon known as “collab culture,” where brands are willing to collaborate with anyone (even Satan, it is implicitly suggested) to sell their products. Moreover, according to MSCHF, the Satan Shoes are also designed to condemn religious tenets that marginalize certain groups of people (for example, gay people, a group that includes rapper Lil Nas X). Thus, the art collective further argued that Nike’s trademark infringement claims are barred by the protection granted by the First Amendment, given the artistic expression that underlies the shoes. Lastly, MSCHF maintained that is unlikely that the Satan Shoes could generate confusion on the part of purchasers, since only highly sophisticated clients can get ahold of them—this is because MSCHF marketed its product only through a proprietary app, a tool already used to convey its artistic message.
COMMENT
The case in question immediately raised to controversy, suggesting there is room for debate on whether the Satan Shoes should be considered works of art, or simple goods regulated under trademark laws. This time the federal judge sided with Nike and issued an injunction against MSCHF on March 31. Shortly afterward, the parties settled the case out-of-court by means of a confidential agreement. But how would Italian courts deal with a similar case?
The relevant provisions for a trademark infringement claim are Art. 20 of the Italian Industrial Property Code (IPC)[6] and Art. 9 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (“EUTM Regulation”) in cases where an EU trademark is involved. Both provisions grant trademark holders the right to prohibit third parties from using their trademarks or similar ones in the context of economic activities. To successfully support a claim, as a rule of thumb rightsholders must prove that the enforced trademark (i) is valid and prior—that is to say, it was successfully filed or registered before the defendant’s use of the contested sign; (ii) its unauthorized use—or the unauthorized use of similar signs—is conducted in relation to identical or similar products or services; and (iii) as a result of such identity or similarity, there may be a likelihood of confusion among the public, which may consist of a likelihood of association between the two signs. The latter condition is not required when enforcing “reputed” trademarks, as they enjoy “ultra-market” protection—meaning that their holders can object to any unauthorized third-party use of identical or similar signs, even for purposes other than that of distinguishing goods and services and irrespective of the differences in the products or services they identify.
As to potential defensive grounds, Recital 21 of the EUTM Regulation provides that “artistic expression should be considered as being fair as long as it is at the same time in accordance with honest practices in industrial and commercial matters. Furthermore, this Regulation should be applied in a way that ensures full respect for fundamental rights and freedoms, and in particular the freedom of expression.” Thus, uses of registered trademarks could be tolerated under European law, as long they are employed for an artistic purpose or even a parodic one. On the other hand, there is no such provision under Italian trademark law, nor is there a “fair use” doctrine. That said, Art. 21(c) ICP does set out some limitations to the exclusive rights granted to trademark owners, providing that the latter cannot prevent third parties from using their trademarks when these are employed “for the purpose of identifying or referring to goods or services as those of the trademark owner.” Together with Arts. 21 and 33 of the Italian Constitution (respectively ensuring freedom of thought and artistic expression), this provision—which covers what is known as “descriptive” use—has been construed under certain conditions also to cover satirical and parodic forms of unauthorized trademark use.
It must be noted that the owners of famous brands—such as the “reputed” trademarks mentioned above— enjoy a far-reaching degree of protection. In fact, they can object to any “use of [their] sign without due cause that takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trademark,” both under Art. 9(c) EUTM Regulation and under Art. 20.1(c) IPC. In this case, it might be harder to rely on the “artistic expression” exemption, as the business reputation of the trademarks’ owners may suffer; this includes claims akin to dilution or tarnishment, such as those made by Nike.
In cases of trademark infringement, the remedies available to rightsholders under Italian law against the infringer include interim and final injunctions (backed with penalties), cancellation of the infringer’s trademark (if registered), withdrawal of the infringing goods from the market, destruction or assignment to the trademark holder of the infringing goods, publication of the decision, and compensation for damages.
[1] Nike’s complaint, p. 2 § 3. Available at https://www.abc4.com/wp-content/uploads/sites/4/2021/03/NIKE-vs-MSCHF.pdf.
[2] Ibid.
[3] Nike’s complaint, pp. 11–13.
[4] Nike’s complaint, p. 18 § 70.
[5] MSCHF’s response, available at https://www.courtlistener.com/recap/gov.uscourts.nyed.461880/gov.uscourts.nyed.461880.14.0.pdf.
[6] Legislative Decree of February 10, 2005 No. 30, “Codice della proprietà industriale,” published in the Italian Official Gazette No. 52 of March 4, 2005.
