By: Monica Riva Talley and Joseph Diorio

It was hard to escape news last month of the “Satan Shoes” collaboration between Lil Nas X and Brooklyn art collective MSCHF Product Studio (“MSCHF”). The limited (666 pairs) release of custom red and black Nike Air Max shoes, modified with the addition of a drop of human blood in the sole of the shoe and featuring satanic verses and imagery, were promoted in conjunction with new music released by Lil Nas X.

The release garnered so much attention that it prompted Nike to quickly file suit asserting trademark infringement, false designation of origin, trademark dilution, and unfair competition in violation of the Lanham Act (along with related state and common law claims), requesting declaratory and injunctive relief, and monetary damages. The fact that Nike filed suit is noteworthy in and of itself, as it did not pursue legal action relating to MSCHF’s 2019 release of “Jesus Shoes” – a modification of an all-white Nike Air Max that allegedly had been blessed by a priest and included holy water from the River of Jordan. In any event, the court granted Nike’s request for a temporary restraining order in the Satan Shoes case, blocking sale of the sneakers; the parties quickly settled.

Getting down to the root, or sole, of the issue, Nike claimed that consumers were confused as to Nike’s association with MSCHF’s Satan Shoes, which still featured the Nike Swoosh Logo and other source indicia. Nike has partnered with others in arguably similar co-branding initiatives; the Satan Shoes launch prompted a significant volume of consumer complaints and calls to boycott Nike, which suggested that consumers believed the product to be a collaboration between MSCHF and Nike.

In response, MSCHF asserted that the collectible Satan Shoes were individually numbered works of art, and therefore considered protected artistic expressions under the First Amendment. The shoes sold out in less than a minute, and all but one of the 666 pairs produced were sold and shipped prior to the TRO hearing.

The use of well-known trademarks within expressive works of art has long resulted in a blurred line between trademark infringement and freedom of expression under the First Amendment. This interplay between the First Amendment and the Lanham Act continues to be a very fact-specific analysis, with the devil (as it were) being in the details. While the Satan Shoes case quickly settled, it still helps illustrate the factors courts consider when determining whether custom/modified products constitute an infringement or a work of art protected under the First Amendment.

The first question is how far a brand owner can extend its trademark rights once the trademarked product is purchased. The first-sale doctrine prevents manufacturers from asserting their trademark rights to control distribution of its products beyond the first sale of the product, as long as the product sold is genuine. See Abbott Labs. v. Adelphia Supply USA, 2019 WL 5696148, at *4-5 (E.D.N.Y. Sept. 30, 2019). The analysis of the applicability of the first-sale doctrine hinges on consumer confusion. Do the changes to the product constitute a materially different product that would lead a consumer to be confused as to the source? In the Satan Shoes case, the ultimate product is still shoes – albeit ones that are dramatically modified. While adding a drop of human blood might sweeten the deal, consumers may mistake these MSCHF works of art as a genuine Nike product – particularly as all still bore the famous Nike Swoosh Logo, and in light of Nike’s past co-branding initiatives.

The second prong of the inquiry is whether “the public interest in avoiding consumer confusion outweighs the public interest in free expression” (the test set forth in Rogers v. Grimaldi and adopted by the Second Circuit). See Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989). The Second Circuit has opined that the “finding of the likelihood of confusion must be particularly compelling to outweigh the First Amendment interest recognized in Rogers.” Under this test, the Lanham Act should only be applied when the use of the trademark has no artistic relevance to the original work, or if it has some artistic relevance but it misleads as to the source of the content of the work. Although the first prong is easily satisfied, to show that the work is misleading to the source requires a weighing of the Polaroid Factors. See Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d. Cir. 1961). If, after weighing these factors, the court finds that the consumer confusion is particularly compelling, it will favor the trademark owner.

As noted above, this particular case quickly settled, with MSCHF agreeing to initiate a voluntary recall to buy back any of the Satan Shoes and previously sold Jesus Shoes. That said, after generating millions on free publicity, perhaps MSCHF and Nike are sole mates after all?

This article appeared in the April 2021 issue of MarkIt to Market®. To view our past issues, as well as other firm newsletters, please click here.

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