MSCHF Settles Upgraded Shoe Dispute With Nike And Promises (Wink, Wink) To Buy Back Satan Shoes

from the good-luck-getting-those-shoes-back dept

There were actually a whole bunch of interesting legal questions raised by Nike's trademark lawsuit against MSCHF the weird "structured chaos" organization that seems to basically sell publicity stunts as a business model. It had teamed up with the musician Lil Nas X to sell 666 pairs of upgrade Nike Air Max 97, complete with red ink (and, it claimed, a single drop of blood) inserted in the sole of the shoe. The lawsuit raised issues regarding first sale/resale rights, art, freedom of expression, trademark, ownership, property, dilution, confusion and more. And... all of it's going nowhere, because a settlement has been reached.

This isn't that much of a surprise. MSCHF execs have admitted in the past that lawsuits only raise their profile, which may be true, but they're also crazy fucking expensive. MSCHF already got the benefit of the publicity bump from the lawsuit, and now probably sought to get things done and over with as quickly as possible -- and that includes agreeing to issue a "voluntary recall" of the shoes -- 665 pairs of which it had already shipped out. MSCHF also agreed to do the same thing for the much smaller number of Jesus shoes it had sold two years ago in a similar stunt.

Of course, the whole thing seems like a charade. It's a voluntary recall, in which MSCHF is supposed to buy back the shoes at their original retail prices "in order to remove them from circulation." But, uh, anyone who has those shoes in their possession now knows that these shoes are way more valuable because of this dispute. I'd be amazed if anyone actually agreed to sell the shoes back to MSCHF, because these shoes just went from already established rare collector's items, to rare collector's items with an even more insane story including the fact that Nike wants them to disappear.

In some ways, this form of settlement just shows how ridiculous the lawsuit was in the first place. Nike's statement on the settlement is hilarious:

“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.”

I mean, c'mon. No one who bought this shoe was "confused." No one's going to want to return it. And, no one's going to contact Nike about any "defect" or "health concern." The whole thing is silly. And yes, that's even though there were some foolish pundits on certain infamous news channels who tried to make a culture war issue falsely claiming Nike was making these shoes. So, sure, Nike can point to the lawsuit as proof they had nothing to do with the shoes, but responding to the brigade of trumped up controversial people is lame. Pretty much everything about this story has been about posturing, rather than anything substantive.

Filed Under: art, confusion, dilution, first sale, free speech, jesus shoes, lil nas x, satan shoes, tarnishment, trademark
Companies: mschf, nike

Nike Sues MSCHF Over Its High Profile Satan Shoes, Claiming Unsafe Blood May Dilute The Exalted Nike Swoosh

from the 1st-sale-and-dilution dept

Well, here's a fun one. Over the weekend, the musician Lil Nas X announced that, along with MSCHF, he was selling "Satan Shoes." From the beginning this was all just a silly publicity stunt that more or less played out probably exactly as those involved expected. If you don't know what MSCHF is then it's worth reading up on the organization that claims it's based on "structured chaos" and only ever so often randomly drops some kind of offering for sale, usually in limited quantities that get lots of attention and sell out quickly. As was summarized in a Business Insider article about MSCHF last year:

There's no apparent thread connecting MSCHF's slew of projects: The team has built a browser add-on that disguises your Netflix watching as a conference call, designed a squeaking rubber chicken bong for smoking weed, and created a YouTube channel solely consisting of videos of a man eating everything from a tub of mayonnaise to a photo of Pete Davidson. But for Whaley, the lack of continuity is the point: As long as the team can figure out the resources to create and launch a product, "nothing is safe."

"Our perspective is everything is funny in a nihilistic sort of way," Whaley said. "We're not here to make the world a better place. We're making light of how much everything sucks."

The company originally got the most attention for another pair of shoes -- the "Jesus shoes." That involved a modified Nike Air Max 97 with -- they claimed -- holy water injected into the soles of the shoe. The Satan shoe is a somewhat obvious follow up to the Jesus shoe. This time, 666 pairs of the shoe were made, also upcycled Nike Air Max 97s. Rather than having "holy water" injected into the soles, this one included red ink, with a promise of a single drop of blood (whose blood is never stated), and then some red stitching and embellishments on the shoes.

A whole bunch of people idiotically freaked out about this, like we were back in the Satanic Panic from the 1980s. Even worse, though the whole thing was (1) clearly a stunt and (2) obviously not endorsed by Nike, the usual brigade of pearl clutching culture warriors immediately insisted that Nike was behind the whole thing, and being a culture warrior seems to have more power when you can blame a company for it. Nike was quick to point out that it had nothing to do with all of this, but by Monday the company decided to sue MSCHF over the shoe, making a variety of trademark infringement claims. The lawsuit gives us excellent images such as this one:

Obviously, if you buy a pair of Nikes, you can resell them. And there is the concept of the first sale doctrine that allows you to resell goods that you bought that are protected by copyright or trademark laws. However, as law professor Alexandra Roberts notes in a detailed Twitter thread, 1st sale does not apply to "materially altered" products. Of course, that doesn't mean that Nike will win either. You can argue over whether or not these shoes are actually "materially" altered, or just cosmetically so. Nike includes the ink/blood in the sole as evidence that the alterations are material:

The material alterations include at least referring to the shoe as the Satan Shoe, adding red ink and human blood to the midsole, adding red embroidered satanic-themed detailing, adding a bronze pentagram to the laces, and adding a new sock liner.

Frankly, this feels... pretty weak. There are examples of artists taking others' products -- even those protected by trademark -- and altering them for artistic purposes.

Much of the trademark claims rely not so much on the likelihood of confusion regarding the origin of the shoes, but rather on dilution -- including both blurring and tarnishment. We've argued in the past that it's insane that dilution and tarnishment are a part of trademark law, as they appear to be complete bastardizations of the purpose and intent of trademark. Trademark law -- unlike copyright and patent law -- is really supposed to be about consumer protection. It's supposed to be so that users aren't buying a product they believe is made by this reputable entity, only to be tricked as it was actually built by that unreputable entity. It was only more recently -- through a concerted effort by trademark lawyers who sought to cast trademarks as "property" and put them next to copyrights and patents -- that the law morphed into something that included "tarnishment" and "dilution."

But... those do exist, and will be a key part of the lawsuit if it moves forward and is not settled quickly (as may well happen).

MSCHF’s use of the Nike Asserted Marks and/or confusingly similar marks has caused, continues to cause, and/or is likely to cause irreparable injury to and dilution of the distinctive quality of the Nike Asserted Marks in violation of Nike’s rights under 15 U.S.C. § 1125(c). MSCHF’s wrongful use of the Nike Asserted Marks is likely to cause dilution by blurring and the whittling away of the distinctiveness and fame of the Nike Asserted Marks. In addition, MSCHF’s wrongful use of the Nike Asserted Marks in connection with satanic imagery is likely to cause dilution by tarnishment.

I am hard pressed to see how this shoe would "whittle" away at the distinctiveness of Nike's brand, but trademark law can be pretty silly sometimes. Nike also does claim that there is confusion and highlights a bunch of social media posts from very, very stupid people who actually believe the shoe comes from Nike itself.

Of course, there's a decent likelihood that MSCHF is loving every minute of this. The company has said in the past that a lawsuit would "help increase the value" of the products it releases.

Meanwhile, the Fashion Law blog has a detailed analysis of the legal issues here (written before the lawsuit was filed) that also notes that 1st sale might not apply here, given the alterations. However, it also highlights that it could make a fair use claim in response:

On the other hand, given the lengths to which MSCHF routinely goes to build a narrative around its individual drops (all of which are relatively limited in quantity), there is a chance that a fair use claim – satire, maybe? – might serve to shield it from liability for making use of the Nike logo in the process.

Lots of interesting legal questions here -- but on the whole, the entire thing just seems so... freaking... pointless. The shoes are clearly a publicity stunt. A bunch of people fell for it, and now Nike is playing into it with a lawsuit.

It's just a silly pair of shoes, people.

Filed Under: blood, confusion, dilution, drop, lil nas x, publicity stunt, satan shoes, shoes, swoosh, tarnishment, trademark
Companies: mschf, nike

Why The Theory Of 'Tarnishment' Doesn't Make Sense For Trademark Law

from the nope dept

We've pointed out many times in the past that trademark law really doesn't belong under the same heading as patents and copyrights, even though they're frequently lumped together as "intellectual property." Patents and copyright are from the same clause in the Constitution and, we're told, are supposed to be about "promot[ing] the progress of science and the useful arts." The origin of trademark law, however, comes out of the commerce clause, and was initially designed to be a consumer protection vehicle, to protect consumers from confusion: you wouldn't want to buy Bob's Crappy Cola thinking that it's really Coca Cola. Over the years, however, some lawyers have worked hard to turn trademark from a purely consumer protection play, into something more akin to copyright and patents, granting trademark holders greater and greater rights to limit what others can do. These are more recent variations on trademark law, and unfortunately some of them have snuck their way into the law. That's why you see things like discussion about "dilution" or "tarnishment."

The theories behind such efforts have always seemed quite questionable and, as with these kinds of laws, the effort to put them into the law (and to expand them) are almost always anecdotal, rather than empirical. So you hear plenty of talk about how even if there isn't any consumer confusion, a brand could be "harmed" by dilution or tarnishment. For example, just recently, we had a discussion about Ben & Jerry's ice cream suing a porn company, for creating porn movies that used covers that looked similar to Ben & Jerry's packaging. We noted a complete lack of likelihood of customer confusion, but, as many of our commenters pointed out, the theory in the lawsuit was more focused on tarnishment.

However, for the life of me, I can't see how a brand is "tarnished" if there's no consumer confusion. The two seem intimately linked. If someone knows that it's just some porn company -- and not Ben & Jerry's itself -- making those movies, how would it ever actually harm Ben & Jerry's? No one seems to be able to explain that part.

And, now there's some empirical evidence to suggest that the theory of tarnishment isn't particularly well supported in the real world. The study is one that we already wrote about, Do Bad Things Happen When Works Enter the Public Domain?: Empirical Tests of Copyright Term Extension by Christopher Buccafusco and Paul Heald -- though we focused on the main argument in that paper, that the public domain does not harm works. However, in proving that point, Buccafusco and Heald actually dabble a bit into the question of tarnishment as it pertains to trademarks. That's because they explore whether or not tarnishment is an issue with works in the public domain, and come up with a situation that has close parallels to the trademark realm. And, as I expected, the tarnishment argument has little support. As you may recall, the study looked at audiobooks for works both in the public domain and out of it. But they also compared professional recordings to amateur ones (from Librivox) and looked at how people judged the quality -- but also how that impacted the perceived value of the underlying works. The results are quite informative:

outside of the realm of copyright law, our study might provide support for those who applaud the judiciary’s continuing reluctance to vigorously implement the Federal Trademark Anti-Dilution Act. The tarnishment prong of dilution doctrine asserts that a trademark loses some of its intrinsic value when consumers encounter the mark used in an inappropriate context, such as when the mark is placed on goods of inferior quality. Our data show that listeners to Librivox recordings find the readers to be inferior but do not translate that sentiment to a significantly lower valuation of the associated work. Finally, the doctrine of post-sale confusion in trademark law rests on the assumption that a trademark owner is harmed when a bystander merely observes a trademark on an inferior product (imagine someone who sees a poor quality Chicago Bears sweat shirt without knowing that it’s a knock off). Our data may suggest that the assumption of such a harm is unrealistic.

This seems rather important, and raises significant questions about why we still allow dilution and tarnishment claims under trademark law, when the data continues to suggest little support for the anecdotal reasons behind them. Perhaps it's time to revisit these theories and bring trademark law back in line with its intended purpose: as a consumer protection statute, and not as a tool for brands to shut down things they don't like.

Filed Under: public domain, tarnishment, trademark