On the heels of a telephonic hearing for the Motion for Preliminary Injunction re: Trademark Infringement on November 16, Judge Mark C. Scarsi has sided with Nike in recently-initiated legal battle against Warren Lotas. While the court refused to require Warren Lotas (“WL”) to escrow the money it has already received from all pre-orders taken to date for the $300 X Staple Pigeon OG and the Freddy Broccolini Chancels sneakers, which Nike claims run afoul of a number of its trademarks, the judge has ordered Los Angeles-based WL to refrain fulfilling the orders for its the X Staple Pigeon OG and the Freddy Broccolini Chancels models – “and/or any colorable imitations of those sneakers” – and from “promoting, offering to sell, selling, and/or taking additional preorders” for the allegedly infringing footwear.
In order for Nike to prevail in its quest for a preliminary injunction, which follows from the trademark and anti-dilution lawsuit that Nike filed in October, it needed to establish that (among other things) it was likely to succeed on the merits of the case, namely, its trademark infringement claim, which requires it to show that it is the owner of a valid trademark and the the alleged infringer is using a confusingly similar mark.
With that in mind and considering the Sleekcraft factors, Judge Scarsi found that Nike is likely to succeed on the merits of trademark infringement as it applies to the WL Pigeon and WL Broccolini. Among other things, such as the sheer strength of Nike’s Swoosh mark, and the “strikingly similarity” between Nike’s Swoosh and the logo on the side of the WL sneakers, the court pointed to examples of actual confusion, namely comments from users on Instagram. “Commenters have stated that they thought Warren Lotas had permission to use Nike trademarks, Warren Lotas was collaborating with Nike, and that the WL Pigeon and WL Broccolini were Nike Dunks,” according to the court, which notes that “this factor weighs in favor of finding a likelihood of confusion.”
In terms of WL’s earlier assertions that preliminary injunctive relief, which will now remain in effect for the duration of the litigation, is not necessary because it already agreed to “refrain from fulfilling preorders or otherwise selling or promoting” the allegedly infringing sneakers and to destroy any already-manufactured version, and alerted consumers to the fact that Nike is not in any way affiliated with the sneakers, the court was not persuaded.
According to Judge Scarsi’s order, while it “seem[s] promising” that WL pulled the Pigeon and Broccolini models, “other actions show Warren Lotas has not ‘unequivocally’ ceased its plans to benefit from the likely infringing conduct.” Primarily, the court says that WL plans to benefit from the initial interest for the allegedly infringing sneakers “by now offering the Reaper” replacement shoe – as well as a “commemorative lawsuit shirt, pencil and bumper sticker” – to customers who preordered the WL Pigeon or WL Broccolini shoes.
Because WL “still has the potential to profit off of the likely infringing conduct” associated with its initial sneakers, Judge Scarsi asserted that “it is irrelevant that Warren Lotas has informed [its] customers that the [replacement] Reaper is not affiliated with Nike, because the initial interest confusion attached prior to that disclaimer.” At the same time, “the fact that preorders have been taken, but no sneakers have been distributed, is also irrelevant.”
WL now has 30 days to confirm in writing under oath that it is in compliance with the terms of the preliminary injunction order. Alternatively, WL may appeal the court’s grant of the injunction for Nike.
*The case is Nike, Inc. v. Warren Lotas and Warren Lotas LLC, 2:20-cv-09431 (C.D.Cal.).