Los Angeles-based brand Warren Lotas made headlines in September when it revealed that it had teamed up with noted Nike collaborator Jeff Staple for what both parties characterized as a “reinterpretation” of the cult-classic shoe that is said to have “catapulted sneaker culture to the masses” when Staple released it with Nike back in February 2005 to intense fanfare and what has since been characterized as a full-blown “riot.” Consisting of Nike’s classic Dunk silhouette and adorned with a stylized version of the Beaverton-based titan’s swoosh on the side, the $300 Staple Pigeon x Warren Lotas Reinterpreted OG Shoes swiftly led to litigation.
In the “trademark and anti-dilution” lawsuit that it filed against Los Angeles-based Warren Lotas LLC (“WL”) and Warren Lotas in his personal capacity in October, Nike asserted that it is not in any way involved in the reintroduction of the infringing sneakers – including the Warren Lotas X Staple Pigeon OG, as well as “the Warren Lotas Freddy Broccolini Chanclas, the Warren Lotas Toxic Green, [and] the Warren Lotas Jason Voorhees Dunk Low” styles – and has not authorized WL’s release of them.
Nike’s suit has swiftly heated up, with the sportswear giant seeking preliminary injunctive relief in order to bar WL from offering up and/or distributing any of the infringing sneakers, including the Lotas x Staple Pigeon, which Lotas offered up in a pre-order capacity in September, and Lotas responding with claims of its own.
A timeline of the legal developments so far is as follows …
Oct. 14 – Nike, Inc. v. Warren Lotas and Warren Lotas, LLC
Nike filed suit against WL and Lotas, alleging that they were “promoting and offering to sell footwear and apparel that use a confusingly similar mark as Nike’s Swoosh deign and/or the identical trade dress as Nike’s Dunk sneakers,” and that as a result, causing “actual consumer confusion” and engaging in trademark infringement, false designation of origin/unfair competition, trademark dilution, and federal unfair competition, and common law trademark infringement and unfair competition.
On the heels of being named in Nike’s suit, WL assured consumers who pre-ordered the allegedly infringing sneakers that they would still get them. In a series of Instagram posts, Lotas stated that “as of now, both releases will be fulfilled as promised.”
Oct. 15 – Nike, Inc. v. Warren Lotas First Amended Complaint
One day later, Nike filed an amended complaint, updating its original filing to include an additional allegation that “at least one purchaser has noticed, and commented on www.reddit.com, that WL may be using photoshopped images of authentic Nike Dunks to promote his fakes.”
Oct. 19 – Motion for Preliminary Injunction re Trademark Infringement
In a motion for a preliminary injunction, Nike echoed the assertions that it made in its complaint, and argued that WL is confusing consumers by way of its infringing sneakers. With the foregoing in mind and given that WL “recently took pre-orders for an unlimited number of two sneakers that are virtual copies of Nike’s most coveted, limited-edition Dunks,” orders that the brand allegedly intends to fulfill starting in December 2020, Nike argued that the confusion already caused “will only escalate if WL is allowed to fulfill the pre-orders.” As such, Nike argued that WL must be formally prohibited from “fulfilling the pre-orders for the infringing sneakers during the pendency of this action.”
As for what exactly Nike is seeking in connection with its preliminary injunction, the Beaverton-based company has asked the court to require that WL be prohibited from “fulfilling all pre-orders taken to date for the infringing sneakers and/or colorable imitations of the infringing sneakers.” And from “promoting, offering to sell, selling, and/or taking additional pre-orders for the infringing sneakers and/or colorable imitations of the infringing sneakers.”
Nike has also asked the court to require WL to escrow the money it has already received from all pre-orders taken to date for the $300 infringing sneakers in order to ensure that if Nike prevails in the case, WL “may return those funds to customers who ordered [its] fakes under the mistaken belief that Nike was the source of the infringing sneakers or otherwise approved or sponsored the infringing sneakers.”
Oct. 26 – Ex Parte Application for Order for Modifying Briefing Schedule For Plaintiffs Motion For Preliminary Injunction
In response to Nike’s motion for a preliminary injunction, WL sought an extension of the timeline to respond. In its filing on October 26, the deadline for its opposition to Nike’s motion for a preliminary injunction, counsel for WL alerted the court that on October 23, 2020, it “communicated by telephone with counsel for Nike to request that Nike agree to a one-week extension of the deadline for [WL] to respond to the preliminary injunction motion … to give the parties more time to work through a potential resolution without the need to file an opposition.”
However, WL claimed that “Nike did not agree to the requested extension,” and thus, WL asked the court to extend the deadline.
Oct. 29 – Order Denying Defendants’ Ex Parte Application
The court denied WL’s request for an extended deadline for its response to Nike’s motion for a preliminary injunction.
Oct. 29 – Opposition to Motion for Preliminary Injunction re Trademark Infringement
WL filed its response, anyway, with its counsel arguing that the equitable remedy that Nike is seeking is not necessary. “Since [Nike’s] lawsuit was filed, WL has been attempting to reach an amicable resolution with Nike,” the company asserted. It further alleged that in connection with “its initial discussions with Nike, WL agreed that it would refrain from fulfilling preorders or otherwise selling or promoting” the allegedly infringing sneakers.
In that filing, WL claimed that on October 29, 2020, it notified all of its customers that the sneakers at issue “were not a collaboration with Nike and that the preorders would not be fulfilled.” In lieu of distributing the allegedly infringing sneakers, WL says that it “offered a refund of preorder payments to any customer that makes such a request.” At the same time, in a declaration that was filed in conjunction with the opposition, Lotas revealed that the brand “would be replacing [the allegedly infringing] with a shoe of a different design” for consumers that opted not to get a refund.
The brand went on to assert that “as Nike knows, the Staple Pigeon OG sneaker has never been manufactured,” and while the Freddy Broccolini Chanclas sneakers “have been manufactured, [WL] told Nike it … would not, fulfill those orders.”
Given that it had “instructed its manufacturer to destroy all inventory of the [allegedly infringing] sneakers” and in light of its cessation of “all sales and promotion of” them, WL asserted that it “has more than complied with all provisions of [Nike’s proposed order],” and thus, the court “need not enter a preliminary injunction.” Based on the foregoing, and “because [it] has unequivocally ceased the allegedly wrongful behavior and there is no possibility the behavior will reoccur,” WL asked the court to deny Nike’s motion for preliminary injunction.
Nov. 2 – Reply in Support of Motion for Preliminary Injunction re Trademark Infringement
On the heels of WL’s opposition, Nike has filed a reply in support of its preliminary injunction motion, asserting that it has established that “a preliminary injunction is warranted” and notes that despite WL’s allegations to the contrary, the company has not “unequivocally ceased the allegedly wrongful behavior” as a result of the “replacement” shoes that it is offering up to remedy the allegedly infringing pre-order ones.
Nike claims that WL’s “opposition itself shows that WL has likely not ceased all of its infringing activity,” as the opposition “confirms WL is promoting ‘replacement’ sneakers that appear to bear the same or a similar infringing outsole as the fakes Nike identified in its preliminary injunction motion” in what Nike calls “a blatant bait-and-switch.” WL “never presented these ‘replacement’ sneakers to Nike for its review or approval,” the sportswear giant asserts, noting that “if it had, Nike would have likely told WL that the [they] are unacceptable because they appear to still infringe at least some of Nike’s Dunk trade dress registrations.”
For example, Nike alleges that the “replacement” sneakers “appear to have at least the same or a similar infringing outsole as the WL Pigeon and WL Broccolini sneakers,” thereby, giving rise to claims of trade dress infringement.
Nov. 4 – Answer to Amended Complaint
Ahead of the court deciding the preliminary injunction issue, WL filed its answer to Nike’s amended complaint, in which it denied most of the company’s assertions, including that its sneakers have infringed Nike’s trademarks. In terms of the defenses set forth by WL, a number of them – waiver, estoppel, and acquiescence – center on the company’s interesting assertion that Nike “collaborator and apparent agent” Jeff Staple, who is not a party to the lawsuit (on either side), “affirmatively authorized” WL to make the Warren Lotas X Staple Pigeon OG sneaker, “including the colorway, logos, and design of the shoe and sole.”
More than that, WL claims that Nike’s claims are “barred, precluded, and/or limited by the doctrine of naked licensing,” as “Nike has permitted rampant, unpoliced use by third parties of its purported trade dress, including the Dunk trade dress,” and as a result of “Nike’s failure to police such third-party usage and/or control the quality of such third-party use, [it] has caused the purported trade dress to cease functioning as a symbol of quality and a controlled source.”
In a separate defense (and in its two counterclaims), WL takes issue with Nike’s trade dress rights, arguing that “one or more of [Nike’s] alleged trade dress elements in the Dunk [shoes] … such as the tread on the sole of the shoe has utilitarian functionality because such trade dress elements are essential to the use and purpose of the sole and/or affect the cost and/or quality of the sole,” and thus, are not valid trade dress rights in light of trademark law’s unwillingness to protect functional elements. With such alleged utility in mind, WL not only claims that it is shielded from Nike’s infringement claims, it argues that the court should formally invalidate two of Nike’s trademark registrations (no. 3,711,305 and 3,721,064), which respectively cover the body and the sole of the Dunk sneaker.
Nov. 18 – Preliminary Injunction
On the heels of a telephonic hearing for the Motion for Preliminary Injunction re Trademark Infringement on November 16, Judge Mark C. Scarsi sided with Nike. While the court refused to require WL to escrow the money it has already received from all pre-orders taken to date for the $300 infringing sneakers in order to ensure that if Nike prevails in the case, WL “may return those funds to customers who ordered [its] fakes under the mistaken belief that Nike was the source of the infringing sneakers or otherwise approved or sponsored the infringing sneakers,” the judge has ordered Warren Lotas 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.
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.).