Nike and RTFKT, the digital fashion/footwear brand it acquired last year, are making headlines with their first joint endeavor into the metaverse. In a widely-covered drop on April 23, the two companies revealed that each of the MNLTH NFT cubes that RTFKT released in February contain a pair of virtual sneakers that mirror the silhouette Nike’s Dunks but can be customized via RTFKT-created skins. In addition to setting the stage for more offerings from the Swoosh and RTFKT, including physical offerings, the drop of the virtual sneakers – which have been coined CryptoKicks – is significant as the name appears to be a nod to some of the technology at the heart of the patent that Nike received back in December 2019 for a “system and method for providing cryptographically secured digital assets,” including the “breeding” of digital sneakers. 

Nike’s “Cryptokicks” is one of the most widely-covered patents when it comes to the metaverse (and virtual fashion/footwear, more specifically), but it is certainly not the only innovation aimed at the virtual world, as leading tech players are developing new hardware and software to cater to consumers’ budding interest in the metaverse, i.e., the combination of aspects of social media, gaming, augmented and virtual reality, and the web that form “an immersive digital world.” 

Noting an uptick on interest in metaverse patents as companies that are developing the building blocks for the virtual world look to protect their innovations, ArentFox Schiff’s Michael Fainberg and Mohammad Zaryab state that among metaverse-specific technologies that they are seeing companies amass patents are “systems for optimizing shared views of virtual objects to multiple wearers of VR headsets; algorithms for generating and moving virtual shapes and scenes in a VR environment based on hand gestures, head motion, or line of sight of the user; systems for generating haptic feedback corresponding to users’ interaction with virtual objects in a virtual environment; and methods for generating 3D avatars of the users, which emulate users’ appearance and behavior,” among others. 

Pursuing patent protection in connection with the virtual world is not without challenges. Just as with physical world-centric inventions, in order to be eligible for patent protection in the U.S. (with regard to the metaverse or virtual world), an invention must new, useful process, and fall within the one of the four statutory categories (machine, manufacture or composition of matter) – or amount to a new and useful improvement on such an invention. While patent protection (i.e., the process of drafting, filing, and working with the United States Patent and Trademark Office (“USPTO”)) “for hardware technologies for the metaverse tends to be quite straightforward – and there are many existing patents for virtual reality and augmented reality headsets,” Mathys & Squire’s Dani Kramer asserts that obtaining software patents for metaverse technologies is “likely to be comparatively more difficult from a subject matter point of view.”  

Fainberg and Zaryab echo this, asserting that patent prosecution is challenging in connection with metaverse tech in large part “due to the strict subject matter eligibility requirements applied to software inventions under 35 U.S.C. 101 in view of the U.S. Supreme Court decision in Alice Corp v. CLS Bank,” which asks – in part – whether a patent application contains claims that are directed to an abstract idea. (This subject matter hurdle was demonstrated in Sandbox Software, LLC v. 18Birdies, LLC back in June 2019 when a Delaware federal court determined that one of metaverse platform Sandbox’s inventions was ineligible for patent protection because it was directed to the abstract idea of playing a multiplayer game and keeping track of its progress, and thus, did not amount to patentable subject matter.)

Software in this realm can also be thorny from novelty/non-obviousness point of view. One of the larger considerations in evaluating a metaverse innovation for novelty/non-obviousness is determining whether the process within the metaverse environment is similar to the same process outside the metaverse environment,” according to DLA Piper’s Joseph Wolfe. “If, for example, the only difference between the proposed invention and the prior art is that the proposed invention is confined to the metaverse environment, it may be difficult for applicants to clear the prior art [with the USPTO].” This is why applicants should “identify that step in the process that is unique to execution in the metaverse environment,” he asserts. 

Looking beyond utility-focused patents, companies are also expected to try to utilize design patent protection for any “new, original and ornamental designs” that they are using in the metaverse. “A virtual business may have – as a primary core asset – a virtual product design, aspects of which that may need protection as trade dress under trademark law – or through a design patent,” Holland & Knight’s Thomas Brooke stated in a recent note

Design patent protection for metaverse-focused ornamental design is certainly possible. As the USPTO states in its Manual of Patent Examining Procedure, “Computer-generated icons, such as full screen displays and individual icons, are 2-dimensional images [that] alone are surface ornamentation,” and that comply with the “article of manufacture” requirement of 35 U.S.C. 171

Protection will, of course, depends on how such designs are claimed. As of now, for instance. “a design patent for, say, a purse, would not cover a purse shown in the metaverse,” Suffolk University Law School professor Sarah Burstein tells TFL. It would be possible, she says, to patent the design of a purse for use in the metaverse “if you put a dotted line around an image of the purse and call it a ‘display screen portion with user interface,’ (e.g., the icons in Apple v. Samsung).” Burstein notes that the USPTO “seems to want to go further, to be able to issue patents for VR/AR/projected purses.” (In a December 2020 request for comments about the article of manufacture requirement of 35 U.S.C. 171, the USPTO suggested that designs for “projections, holograms, and virtual and augmented reality” are protectable.) 

Ultimately, increasing attempts by brands to engage with the consumers in the metaverse by way of games and specific metaverse platforms are “sure to present applicants and practitioners with its own unique set of challenges for obtaining patent protection,” Wolfe states. The potential good news for filing parties, per Wolfe is that “broadly speaking,” many of the same principles or best practices for patenting things like “blockchain innovations and artificial intelligence innovations can be applied to metaverse innovations to help applications successfully navigate through the patent office.” 

As part of its deadly assault on Ukraine, Russia has taken the rare step to use intellectual property rights as a war tactic. In early March, the Russian government issued a decree saying that Russian companies are no longer obliged to compensate owners of patents, utility models, and industrial designs from “unfriendly” countries, namely western states who have issued sanctions against Russia, including the United Kingdom and United States. 

This means that Russian businesses can use intellectual property, such as patented inventions or fashion designs, without having to pay or seek the consent of the rights holders. Affected companies cannot enforce their patents and designs against Russian imitators. This effectively legalizes intellectual piracy in a country already known for failing to adequately protect intangible assets. Last year, Russia was added to a U.S. government “priority watch list” of countries which do not sufficiently protect US intellectual properties.

Vladimir Putin’s move is clearly a reaction to the west’s economic sanctions and suspension of Russia’s trade privileges. It is also an answer to many multinational companies’ decisions to cease doing business with Russian companies. Sanctions and boycotts have massively affected the Russian economy to the extent that the country is now on the verge of bankruptcy with interest rates having doubled. The stock market has remained closed for weeks and the ruble has fallen dramatically.

Unprecedented attack on intellectual property

The suspension of intellectual property rights as an economic weapon in the context of a conflict is unprecedented, at least in recent decades. Historical examples date back to the first world war, when the U.S. introduced the Trading With the Enemy Act. This act seized copyright and patents owned by enemy countries, including the patent to aspirin, famously a German invention. Following the war, the Aspirin trademark owned by the German pharmaceutical company Bayer was given up to the U.S., France, UK, and Russia, as part of Germany’s war reparations agreed in the Treaty of Versailles. 

Russian officials have hinted that other intellectual property rights owned by western countries may be soon restricted, including software and trademarks. This could allow local entrepreneurs to appropriate and exploit – without permission and for free – brands such as McDonald’s. One Russian restaurant chain has even recently adopted, and applied to register locally, a logo very similar to the famous golden arches. The sanctions have also led a Russian judge to dismiss a copyright and trademark infringement lawsuit brought by the British company that produces animated series Peppa Pig. Andrei Slavinsky said in court that the “unfriendly actions of the United States of America and affiliated foreign countries” influenced his decision. 

Russia Intellectual Property
image via @JoshGerben

Ukraine, for its part, has not been inactive in this intellectual property battle. Its ministry of defense recently hacked and leaked confidential documents it claimed to have taken from a Russian nuclear power station.

Does it violate international law?

Russia’s suspension of patents and other intellectual property rights owned by western companies may violate international treaties which protect these assets at global level. All countries of the World Trade Organization (“WTO”) need to respect these laws and guarantee that foreign businesses can enforce intellectual property rights against imitators.

Countries damaged by the Russian measure may bring Russia to a WTO court and ask for additional sanctions to be imposed. This would again hit Russian businesses, especially those which rely on brands and patented technology, as well as the creative industry sector. The only way Russia could justify the measure would be to rely on a security exception made available by the WTO itself. This exception allows countries to take any action they consider necessary to protect their essential security interests in times of war. But it has never been invoked by any state in the context of an armed conflict, and therefore never tested before the WTO judges.

If Russia is expelled from the WTO club, as has been proposed, that would, paradoxically, insulate it from global intellectual property challenges. No country would be able to bring Russia before a court of an organization it is no longer a member of. These are predictions of what could happen if the war continues. It goes without saying that a prompt end to the conflict may instead relax the tension between the west and Russia, and put an end to the current intellectual property battle.

Enrico Bonadio is a Reader in Intellectual Property Law at City, University of London. Alina Trapova is an Assistant Professor in Law and Autonomous Systems at the University of Nottingham. (This article was initially published by The Conversation.)

Lululemon and Peloton are fighting about more than lookalike sports bras and yoga pants in their newly-initiated legal clash. Peloton apparel, which allegedly infringes Lululemon design patents and trade dress, is at the heart of the declaratory judgment (“DJ”) action that the exercise bike-maker lodged in a New York federal court and the infringement complaint that Lululemon filed with a California federal court shortly thereafter. However, as the motion to dismiss that Lululemon filed on Friday indicates, the parties are currently at odds over a more fundamental issue: where their case should play out. 

According to the motion to dismiss it filed with the U.S. District Court for the Southern District of New York on January 7 in response to Peloton’s complaint, Lululemon argues that its former partner used the “professional courtesy” that Lululemon granted it to “game” the venue in the design patent and trade dress infringement case. Specifically, Lululemon asserts that it was “misled” by Peloton’s legal counsel, which requested additional time to provide a substantive response to the cease-and-desist letter that it received from Lululemon, and then used that time to “prepare a [DJ] complaint and then race to this courthouse, its home forum, to preempt Lululemon from filing a complaint in its choice of forum.” 

While venue conflicts are generally governed by the first-to-file rule, which mandates that when there are two competing lawsuits, the first suit should have priority, Lululemon argues that there is a “critical exception” when the first-filed lawsuit is “an improper anticipatory declaratory judgment action.” That is precisely what is going on here, per Lululemon, given that New York-based Peloton’s DJ action was filed in response to a direct – and concrete – threat of litigation. 

Turning its attention to a number of arguments that Peloton made to refute the characterization of its DJ as anticipatory, including that it filed the action because “it could not afford the harm to its reputation from leaving Lululemon’s claims unanswered,” Lululemon asserts that such arguments are “baseless.” Among other things, Lululemon argues that there was no risk of reputation harm for Peloton as a result of the claims that it made in its cease-and-desist, as such claims were not public at that time, and thus, “posed no harm” to Peloton’s reputation. In fact, Lululemon alleges that it was Peloton that “publicly aired the parties’ dispute.” 

Lululemon Peloton
One of Peloton’s bras (left) & a Lululemon patent drawing (right)

Also weighing in favor of dismissal? The issue of convenience, which is typically a venue-related consideration, but according to Lululemon, is not quite as relevant here as it might be in other cases, as both parties are “enormous, publicly-traded companies, each having annual revenues exceeding $4 billion” and a “nationwide presence.” This makes it so that “litigation in any specific venue in the U.S. is not particularly convenient or inconvenient.” 

Beyond that, Lululemon claims that California – not New York – is the “center of Peloton’s infringing activities.” Peloton maintains “13 showrooms in California, its greatest number in any state” versus 6 in New York. As for its own operations, Lululemon states that a redacted (but seemingly substantial) percentage of its annual sales come from California, which plays home to what is “effectively its U.S. headquarters for product and branding, where [it] makes most of its major project development and branding decisions.” Meanwhile, 17 percent of Lululemon’s retail stores are located in California, versus 6 percent in New York.   

Considered along with the policy at play (namely that “federal courts, including both the Second Circuit and Federal Circuit, uniformly condemn this sort of conduct,” as it serves to “discourage potential plaintiffs from communicating with potential defendants in an effort to reach out-of-court resolutions of their disputes”), Lululemon argues that “the plainly anticipatory nature of Peloton’s [DJ] action weighs heavily in favor if dismissal of this action.” 

Should the court opt to dismiss Peloton’s DJ, the case as a whole would still be far from over, as such a decision would not impact the complaint that Lululemon lodged in California in the wake of Peloton’s filing, and Peloton would inevitable lodge its own claims in connection with that suit.

The rival cases got their start in late November when Peloton – fresh out of a 5-year-long apparel deal with Lululemon – filed a DJ action in New York federal court, seeking an order that it is not infringing a number of Lululemon’s design patents and trade dress by way of its new apparel offerings. Lululemon responded with a counter suit, arguing that the Peloton is on the hook for design patent and trade dress infringement in connection with its sale of “copycat” athleticwear on the heels of pulling the plug on the parties’ 5-year-long co-branding partnership. 

According to its complaint, Lululemon claims that “unlike innovators such as [itself],” when Peloton opted to launch its own collection of apparel, it “did not spend the time, effort, and expense to create an original product line, [and] instead, Peloton imitated several of lululemon’s innovative designs and sold knock-offs of lululemon’s products, claiming them as its own.” 

The case is Peloton Interactive, Inc. v. Lululemon Athletica Canada Inc., 1:21-cv-10071 (SDNY).

“Nike has spent decades creating game-changing digital sport technologies,” the Beaverton, Oregon-based sportswear titan stated in a new lawsuit, with such efforts resulting in “a robust portfolio of patents” that protect these innovations, at least a few of which are allegedly being infringed by rival Lululemon via its Mirror Home Gym and accompanying mobile applications. According to the complaint that it filed in a New York federal court on Wednesday, Nike claims that the Lululemon Mirror relies upon tech that is protected by six of the utility patents that it maintains for an interactive athletic equipment system, as well as for athletic performance sensing and/or tracking systems and methods, and monitoring fitness using a mobile device, among other things. 

In its complaint, Nike asserts that the technology at the heart of the $1,500 at-home exercise system – which Lululemon brought in-house when it acquired fitness startup Mirror in June 2020 for $500 million – “practice[s] the claimed inventions of [its] asserted patents,” namely, U.S. patents 8,620,413; 9,278,256; 9,259,615; 10,188,930; 10,232,220; and 10,923,225, all of which are utility patents (as distinct from design patents), and thus, protect the invention of a new and useful process, machine, manufacture, or composition of matter. 

The Nike patents at issue here cover everything from “a watch or other type of portable electronic console that employs a number of different functions in order to improve its usability,” such as allowing a user “to connect the watch to one or more remote electronic devices,” and then “display[ing] information related to the connected electronic devices” to an “interactive athletic equipment system,” in connection with which “athletic data relating to a single person or group of people is collected at a central location, and subsequently displayed at a desired remote location so that the person or people can review and critique their performance.” 

Another one of the patents cited by Nike consists of “athletic performance sensing and/or tracking systems and methods,” namely, “components for measuring or sensing athletic performance data and/or for storing and/or displaying desired information associated with the athletic performance to the user (or others),” which allow users “create workouts, select and present media content during the athletic performance, etc., e.g., to help keep users entertained and motivated.” 

In furtherance of its patent rights, Nike generally enjoys the ability to exclude others from making, using, or selling an invention that makes use of claims in its patents without authorization for the duration of such patents, which is where Lululemon allegedly comes in. Per Nike, by way of the Mirror device, Lululemon “makes, uses, offers for sale, sells, and/or imports into the United States products that practice the claimed inventions” of its patents, and thus, is infringing claims of the ssserted patents. 

Despite being put on notice by Nike via a notice letter on November 3, 2021, Nike claims that Lululemon “continues to make and sell The Mirror Home Gym and accompanying mobile applications without [its] authorization and in violation of [its] patents,” prompting Nike to file suit.

A drawing from Nike’s 9,278,256 patent

According to the Swoosh, it “invests heavily in research, design, and development; and those efforts are key to [its] success” and its “competitive positioning,” making the suit a nod to Nike’s enduring quest to maintain its place at the top of the market as a whole, but also in the connected fitness space, as many consumers increasingly split their time between working out at the gym and at home. In addition to consumers increasingly adopting a hybrid approach to fitness, COVID-prompted lockdowns, corresponding gym closures, and enduring variants have served to accelerate the at-home and connected fitness, thereby, increasing competition for a piece of the market that at least some industry estimates expect will reach nearly $60 billion by in value in 2027.

This adds another element to the already cut-throat market segment, one that is largely dominated by giants with sizable portfolios of protections, large legal teams and budgets, and the desire to protect not just the often-enormous R&D that goes into sports tech but their spots in a market that is being infiltrated by relative new-comers, such as Mirror, Peloton, and co.

In a response to Nike’s letter late last year, Mirror took issue with the infringement claims made by counsel for Nike, and has since refused to back down from offering up its buzzy at-home workout system. A rep for Lululemon has since stated that Nike’s “patents in question are overly broad and invalid,” and the company is “confident in our position and look forward to defending it in court.” 

Setting out six claims of patent infringement, Nike is seeking monetary damages and injunctive relief to permanently bar Lululemon – which is currently embroiled in a legal squabble with Peloton after accusing the exercise bike-maker of infringing its design patent and trade dress-protected apparel – from infringing its patents.

The case is Nike, Inc. v. Lululemon Athletica Inc., et al., 1:22-cv-00082 (SDNY). 

This year, the filing of a number of fashion and broader retail industry lawsuits and developments in previously-filed ones stood out in the crowded landscape of litigation in many cases because they indicate larger trends within the fashion space. These included lawsuits that stem from the burgeoning resale market, with a few customization and upcycling-centric matters, in particular, proving to be timely, along with Chanel’s enduring battle with The RealReal, as brands continue to crack down on how their trademarks are used in the secondary market. At the same time, issues related to sustainability – one of the driving forces behind the enduring rise of resale (along with affordability and availability in light of current holiday shipping/supply demands) – were also at the forefront of a handful of cases that likely shed light on what is to come for brands that are putting forth Environmental, Social, and Corporate Governance-focused marketing. 

Not to be overlooked, the striking onslaught of Web3 tech, including non-fungible tokens, has led to a budding string of lawsuits, a pattern that will almost certainly continue for the foreseeable future, as fashion brands (and others) really start to race into the metaverse in order to connect with consumers, and benefit from new revenue streams, and still yet, in what might prove the case for at least some brands, as a way to stake their ground in light of rising instances of unauthorized use of brands’ trademarks in this medium, which mashes up virtual reality, augmented reality, social media, video, and other tech components. 

And finally, there are no shortage of sportswear and footwear fights underway, with Nike, adidas, New Balance, and Crocs initiating litigation this year against similarly-situated brands, and of course, Peloton and Lululemon sparring in their recently-lodged rival claims. The bigger picture here, of course, is the continued growth of the activewear market, something that has been helped along (in part) by the pandemic, with the athleisure market, alone, projected to grow to upwards of $450 million by 2026.

Here is a look at a dozen of the many interesting and notable fashion lawsuits and legal developments that we saw in 2021 …

1. Nike Sued MSCHF Over Modified “Satan Shoes”

One of the most interesting lawsuits of 2021 was actually one of the quickest to come off of the docket. Within hours of MSCHF dropping more than 600 pairs of its blood-infused “Satan Shoes” in March, Nike filed a trademark infringement and dilution suit, accusing the Brooklyn, New York-based “art collective” of “taking orders for the customized Nike Air Max 97 shoes” that it had “materially altered to prominently feature a satanic theme.” Nike never approved or authorized such customization or the subsequent sale of MSCHF’s Satan Shoes, the Beaverton-based behemoth asserted in its complaint, claiming that while MSCHF may have acquired authentic Nike sneakers, its customization of the sneakers has resulted in shoes that “are not genuine Nike products.” 

The heavily-hyped launch caused widespread consumer backlash, including a barrage of social media commentary and calls for a boycott of Nike over the customized shoes, which caused significant damage to its brand, Nike argued. 

The case, which settled in a matter of two weeks, raised a number of interesting and timely issues, including ones that center on the legality of marketing and selling originally-authentic, trademark-bearing goods that have been modified, which has been a theme in a number of recent cases, as “bootleg” products and customized goods continue to find favor among consumers, much to the displeasure of the targeted brands. 

2. Allbirds Faces Suit Over Sustainability-Centric Advertising

In light of its positioning as a sustainable company, something that is at the heart of its advertising and its IPO filings (and those of a growing number of other companies), Allbirds garnered the attention of a class of plaintiffs this year, who claim that the footwear-marker is not living up to the claims that is makes in its marketing, including about the carbon footprint of its products, and its “sustainable” and “responsible” manufacturing practices. 

According to the complaint that she filed in a New York federal court this summer, plaintiff Patricia Dwyer claims that Allbirds knows that “consumers are increasingly influenced by the business practices of companies they choose to engage with, [and that] factors important to consumers include whether a company acts in way that protects the environment, labor practices and animal welfare.” The brand’s “marketing is based on all these factors, which has helped it become worth over one billion dollars,” Dwyer asserts. However, she argues that despite its advertising being “replete with eco-friendly phrases,” the reality of Allbirds’ operations does not match that “eco-friendly”-focused marketing, and the footwear brand is peddling “false, deceptive and misleading” information. 

Not the only brand facing legal pushback over its green claims, Canada Goose is embroiled a false advertising suit after allegedly misleading consumers about the nature of the trapping methods used to source the fur for its buzzy jackets by claiming that it is dedicated to “the ethical, responsible, and sustainable sourcing and use of real fur.” 

3. Miramax v. Tarantino Joins a Growing List of NFT Lawsuits

Miramax v. Tarantino is the latest lawsuit to center on the budding field of non-fungible tokens (“NFT”). Eager to cash in on the tech trend that has taken over the web, Miramax claims that Quentin Tarantino “announced plans to auction off seven ‘exclusive scenes’ from the 1994 motion picture Pulp Fiction in the form of NFTs.” The problem with that, according to Miramax’s November copyright and trademark infringement, and breach of contract complaint, is that the famed director “granted and assigned nearly all of his rights to Pulp Fiction (and all its elements in all stages of development and production) to Miramax,” including those that would enable him to legally sell the NFTs at issue. 

The Miramax case is one of the most high-profile examples in the budding field of NFT-related litigation. It follows from the similarly-noteworthy July 2021 securities class action lawsuit that an individual named Jeeun Friel filed against Dapper Labs Inc., alleging that the defendant’s NBA Top Shot platform actually sold securities when it offered up NBA-centric NFTs, and ran afoul of U.S. securities laws in the process, as the NFTs were not registered with the Securities and Exchange Commission.  

4. The RealReal Files Anti-Competition Counterclaims Against Chanel 

In February, a New York federal judge gave The RealReal (“TRR”) the go-ahead to amend its answer in the trademark infringement and counterfeiting case filed against it by Chanel in 2018 to assert anti-competition counterclaims. The crux of TRR’s antitrust arguments is that Chanel has been quietly carrying out an “aggressive campaign” of “exclusionary and anticompetitive conduct” aimed at “monopoliz[ing] the market” – and thus, the supply and price of its goods, both new and pre-owned – to the detriment of its competitors and consumers, alike. In direct response to the burgeoning, multi-billion-dollar luxury resale market, which is “a new threat to the core of [Chanel’s] business model,” TRR alleges that Chanel has gone beyond the work of a diligent company looking to preserve the meticulously-crafted positioning of its rarefied luxury brand in the face of the evolving modern marketplace. 

TRR asserts that the 110-year old luxury stalwart has “attempted, acquired, and maintained monopoly power” in the “relevant market” by way of an ongoing scheme to “impair the growth and development of innovative resale rivals like TRR who threaten Chanel’s dominance” by “creating a robust resale market where none previously existed,” and thereby, giving consumers increased access to “a rich supply of Chanel handbags that would not otherwise be available to [them].” 

While the proceedings in the case were put on hold earlier this year as Chanel and TRR participated in mediation, the stay has since been lifted in light of the parties’ failure to reach a settlement. 

5. adidas Files Suit Against Thom Browne Over Stripe Trademarks

Fashion lawsuits

Adidas is suing Thom Browne in one of the latest battles that it has waged over its famous three stripes. According to the trademark infringement and dilution complaint that it filed in a New York federal court on in June, adidas claims that “despite Thom Browne’s knowledge of [its] rights in the famous three-stripe mark,” which adidas says that it has been using since as early as 1952, the New York-based fashion brand “has expanded its product offerings far beyond [its] formal wear and business attire speciality,” and is “now offering for sale and selling athletic-style apparel and footwear featuring two, three, or four parallel stripes in a manner that is confusingly similar to adidas’s three-stripe mark.”

Even though adidas’s stripes serve as a “widely recognized” trademark that acts as an “indicator of the origin of [its] goods” and have been famous since “long before Thom Browne began distributing, marketing, promoting, offering for sale, or selling” sportswear that bears lookalike stripe marks, adidas alleges that Browne has taken to offering up sportswear that “imitates [its] three-stripe mark in a manner that is likely to cause consumer confusion and deceive the public regarding its source, sponsorship, association, or affiliation,” and thereby, is “irreparably harming adidas’s brand and its extremely valuable [mark].” 

Counsel for Thom Browne has since claimed that adidas has “failed to properly and adequately plead ownership of valid trademark rights that could be the basis of its claims and has failed to identify the specific Thom Browne products that could possibly violate adidas’s purported rights.”

6. Nike Says it Cannot Allow “Customizers” to Build Businesses Off of its Famous Trademarks

On the heels of its short-lived legal battle against MSCHF, Nike has taken on the increasingly robust customs market by way of a number of lawsuits, with the Beaverton, Oregon-based sportswear behemoth asserting that it – and its wildly valuable trademarks – are facing “a growing threat [of] unlawful infringement and dilution by others that seek to unfairly trade-off of Nike’s successes by leveraging the value of Nike’s brand to traffic in fake products.” One of those third-parties that is looking to piggyback on the appeal of Nike and the burgeoning customization market? Drip Creationz. 

In the complaint that it filed in a federal court in California on July, Nike claims that Drip Creationz is on the hook for trademark infringement and dilution, and counterfeiting, among other causes of action, for offering up and selling products “purporting to be genuine Nike products, but that are, in fact, counterfeits,” namely, “knockoff Air Force 1-style shoes that it refers to as ‘D1’ shoes,” which bear designs that allegedly infringe upon Nike’s registered trademarks for to its Air Force 1 shoes and that have “crooked proportions, messy stitching, cheap details, and [are] taller than the real Air Force 1 shoes.” 

7. Nike Initiates ITC Case to Block adidas From Importing “Infringing” Primeknit Sneakers

Fashion lawsuits

An almost decade-long fight between Nike and adidas recently spilled over into a proceeding before the International Trade Commission (“ITC”), with Nike asking the federal trade body to block the import of adidas’ Primeknit footwear on the basis that the sneaker tech infringes a number of its utility patents. In the complaint that it filed with the ITC this month, Nike alleges that adidas is violating Section 337 of the Tariff Act of 1930 by importing sneakers that infringe upon its rights in the “game-changing” Flyknit tech and the “novel method of designing and manufacturing uppers that enables Nike to create footwear that excels in performance, design, and aesthetics, while reducing materials and waste.”

Unlike itself, Nike claims that “adidas AG, adidas North America, Inc., and adidas America, Inc. (collectively, ‘Respondents’ or ‘adidas’) have forgone independent innovation,” and instead, have “spent much of the past decade challenging several of Nike’s patents directed to Flyknit technology.” All the while, as adidas was “unsuccessfully challenging” the Flyknit patents, the German sportswear giant “continued to use Nike’s patented technology without permission,” Nike claims. The result, according to the Beaverton, Oregon-based behemoth? “Today, adidas offers dozens of footwear products that infringe Nike’s patents,” including by way of its “many so-called Primekit shoes.” 

8. Peloton Sues, Lululemon Countersues in Apparel Fight

A behind the scenes scuffle between Lululemon and Peloton recently landed in federal court, with the exercise bike -maker arguing that Lululemon threatened it with litigation over its “similarly striking” garments. According to the declaratory judgment action that it filed with the U.S. District Court for the Southern District of New York on November 24, Peloton claims that just over two months after it launched an activewear collection of its own and terminated its 5-year apparel partnership with Lululemon, the Vancouver-based athleticwear company has alleged that a handful of Peloton’s private label products infringe its design patents, and that a pair of Peloton-branded leggings infringes its trade dress rights. 

Lululemon has responded to Peloton’s declaratory judgment action with a counter suit, arguing that the New York-based Peloton is on the hook for design patent and trade dress infringement in connection with its sale of “copycat” athleticwear on the heels of pulling the plug on the parties’ 5-year-long co-branding partnership. According to the complaint that it filed in a California federal court, Lululemon claims that “unlike innovators such as [itself],” when Peloton opted to launch its own collection of apparel, it “did not spend the time, effort, and expense to create an original product line, [and] instead, Peloton imitated several of lululemon’s innovative designs and sold knock-offs of lululemon’s products, claiming them as its own.” 

9. Tiffany & Co., Costco Settle Years-Long Lawsuit Over Sale of “Tiffany” Rings

This year, Tiffany & Co. and Costco settled their long-running lawsuit over the warehouse chain’s sale of “Tiffany” rings that were not made or authorized by the famed New York jewelry company. The July settlement follows from a win for Costco last summer when the U.S. Court of Appeals for the Second Circuit vacated a lower court’s summary judgment decision – in which it held that Costco was liable to Tiffany & Co. for willful trademark infringement and counterfeiting – and remanded the case back to the district court for a new trial. In contrast with the trial court judge’s finding, the appeals court held that reasonable jurors could have found that “discriminating” Costco customers would not be confused about the source of the rings and that Costco’s use of the “Tiffany” name was not meant to mislead customers. 

The case got its start on February 14, 2013 when Tiffany & Co. filed suit against Costco in a New York federal court, accusing the Issaquah, Washington-headquartered retail chain of trademark infringement, counterfeiting, and unfair business practices, among other causes of action, and seeking tens of millions of dollars in damages. According to Tiffany, Costco had sold engagement rings – some costing upwards of $6,000 – using the “Tiffany” name to thousands of Costco members, who snatched up the sparklers under the false impression that they were authentic Tiffany products. According to Tiffany’s estimates, some 3,349 customers purchased “Tiffany” rings at Costco during the relevant period.

10. 1-800 Contacts Names Warby Parker in Keyword Search Lawsuit

Warby Parker is looking to tap into the pool of millions of customers that 1-800 Contacts has amassed as a result of more than a decade in business and hundreds of millions of dollars worth of “advertising, marketing, and promotion,” the Draper, Utah-based contacts company has argued. According to the complaint that it filed in a New York federal court in August, 1-800 Contacts asserts that Warby Parker is engaging in “continuing trademark infringement, unfair competition, and deceptive advertising practices” in an effort to attract consumers given its status as a “new entrant in the online contact lens marketplace.” 

In addition to “trad[ing] off 1-800 Contacts’ brand name and reputation through unauthorized bidding on 1-800 Contacts’ trademarks as search engine keywords that generate Warby Parker advertisements,” 1-800 Contacts claims that Warby Parker has hijacked the allegedly “distinctive look and feel” of the its website – namely, “the prominently featured shade of light blue on its homepage,” as well as “the light blue rectangular shaded box that spans most of the screen in a horizontal configuration and displays representative contact lens product packages to the right of a discount offer to ‘Get 20% off your first order’” – in an attempt to dupe consumers given its status as a relatively “new entrant in the online contact lens marketplace.” 

Warby Parker has since asserted that, among other things, 1-800 Contacts does not maintain rights in the appearance of its website, in part, because “multiple companies selling contact lenses online use the color blue and/or the same general layout as referenced [by 1-800 Contacts] in connection with their online promotion, advertisement, and sale of contact lenses.” 

11. New Balance Claims that Michael Kors is Infringing its Famed Trademarks Via Lookalike Sneakers

Fashion lawsuits

In an effort to police its famous “N” and the source-identifying design of its 574, New Balance filed suit against Michael Kors this summer on the basis that the fashion brand “recently began using an N design on footwear that is virtually identical and confusingly similar to” its own mark, as well as the trade dress-protected design of its 574 sneakers. According to the complaint that it filed in a federal court in Massachusetts in August, New Balance claims that Kors’ “intentional adoption of a letter N on footwear is likely to cause confusion among consumers and/or suggest an affiliation, connection, or association [with] New Balance” when no such affiliation exists. 

To make matters worse, New Balance assets that “Michael Kors (the individual) is a well-known ‘fan’ of New Balance, which increases the potential for consumers to mistakenly believe that the Michael Kors products are licensed by or affiliated with New Balance,” which points to a Harper’s Bazaar interview in which Mr. Kors states that he has “a good 15 pairs of New Balance in black, and I don’t always wear black. In the summer I’ll go to this dusty putty color. That’s my summer shoe.”

12. Crocs is Looking to Block Infringing Imports of its Wildly Popular Clogs

And in one final footwear fight, Crocs filed a complaint with the U.S. International Trade Commission in June, claiming that two dozen companies – from Skechers to Loeffler Randall – are engaging in the unlawful importation and sale of “certain footwear products and packaging that violate registered trademarks used in connection with certain Crocs shoes,” including Crocs’ registered trademark rights in its “CROCS” word mark, as well as “the three-dimensional configuration of the outside of an upper of a shoe, the textured strip on the heal of the shoe, the decorative band along the length of the heel strap.”

The surge in lookalike footwear comes as Crocs has been riding a striking wave of demand that intensified amid the COVID-19 pandemic, sending sales of its signature foam clogs through the roof. At the time of filing, the Bloomfield, Colorado-based Crocs revealed that its quarterly revenues had groww by 64 percent to $460.1 million up from $281.2 million a year earlier, topping analyst expectations of $415 million for the 3-month period.