Nike and John Geiger Collection have settled a trademark lawsuit over “copycat” footwear. In a motion lodged with the U.S. District Court for the Central District of California on Tuesday, the parties are seeking the court’s approval of a consent judgment and motion for permanent injunction regarding Nike’s trademark infringement and dilution claims against John Geiger Collection, which stem from its sale of its signature GF-01 sneakers, and the Los Angeles-based footwear brand’s declaratory judgment counterclaims against Nike, in which it sought to have Nike’s Air Force 1 (“AF1”) trademark registrations invalidated on the basis that the AF1 trade dress consists of “functional features.”  

Setting the stage in the proposed consent judgment and permanent injunction, Nike and John Geiger Collection (“JGC”) do away with Geiger’s counterclaims, which will be dismissed with prejudice, as “JGC stipulates, agrees, and acknowledges that Nike is the exclusive owner of the following registered trademarks and all related common law rights: U.S. Trademark Registration Nos. 3,451,905; 3,451,907; and 5,820,374,” which cover Nike’s AF1 designs, and JGC “stipulates, agrees, and acknowledges that [these] marks are valid and enforceable.” (JGC previously argued that Nike lacks rights in the AF1 marks, as elements of the marks are “essential to the use and purpose of the sneaker and/or affect the cost, quality, performance, durability, and safety of the sneaker,” making them functional and ineligible for protection. The company also alleged that Nike has failed to police unauthorized uses of its AF1 marks, thereby causing them “to cease functioning as a symbol of quality and a controlled source.”)

Turning to the claims that Nike made against Geiger in furtherance of its lawsuit, the parties state that a judgment should be entered against JGC “on all of Nike’s counts in the First Supplemental First Amended Complaint” – trademark infringement, false designation of origin, contributory trademark dilution, and unfair competition – “because JGC, although without intent, infringed [Nike’s] asserted marks by having manufactured, using, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, and/or selling [a long list of the GF-01] products.” (While JGC has seemingly traded an infringement judgment (and other things) in exchange for Nike dropping its claims, there is certainly some room for discussion about likelihood of confusion and thus, infringement, here.)

Nike sneaker and John Geiger sneaker

As for what will happen to any remaining inventory that JGC has of the “infringing” GF-01 sneakers, the agreement enables the company to sell-off its “existing inventory […]  up to and through May 31, 2023,” and after that point, the company is required to “destroy within 14 days any remaining inventory of infringing products.” 

As part of the settlement, Nike has also garnered itself a permanent injunction (subject to court approval), which places strict limits on what JGC and any parties acting in concert with it cannot do with regards to Nike’s trademarks, this includes a permanent bar against “manufacturing, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, or selling any products … under the asserted [AF1] marks or any other [Nike] marks” that are likely to confuse consumers into believing that any JGC products “or any of JGC’s commercial activities are sponsored or licensed by Nike, are authorized by Nike, or are connected or affiliated in some way with Nike.” 

Beyond that, JGC cannot imply that it has “Nike’s approval, endorsement, or sponsorship of, or affiliation or connection with, JGC’s products, services, or commercial activities, pass off [its] business as that of Nike, or engag[e] in any act or series of acts … [that] constitute unfair methods of competition with Nike and from otherwise interfering with or injuring the asserted marks or the goodwill associated” with those mark, among other things.

The filing follows from a win for Nike early this year when Judge Mark Scarsi of the U.S. District Court for the Central District of California refused to dismiss the Beaverton-based sportswear giant’s claims against JGC, who accused the brand of attempting to “capitalize on the strength and fame of Nike and its Air Force 1 (“AF1”) by making, promoting, advertising, marketing, and selling footwear bearing the AF1 trade dress and/or confusingly similar trade dress,” albeit without Nike’s involvement or authorization, among other things. (More about that here.)

Nike sneakers and John Geiger sneakers

A statement published on Geiger’s Twitter on Tuesday states, “Nike and John Geiger have resolved the lawsuit related to Nike’s Air Force 1 trade dress and John Geiger’s footwear products, specifically his GF-01 Shoes. The lawsuit has been resolved through an amicable resolution that includes a consent judgment. As part of the resolution, John Geiger has agreed to modify the design of his GF-01 shoes. Nike respects John Geiger as a designer and other designers like him, and both parties are pleased to resolve this dispute in a way that allows John Geiger to continue building his brand while also respecting Nike’s intellectual property rights in its iconic Air Force 1 trade dress”

Customizations, Unauthorized NFTs 

Nike’s lawsuit, which started as an action against Warren Lotas’ footwear manufacturer La La Land Production & Design and subsequently added Jian Geiger as a defendant, comes as part of an enduring push by the sportswear giant to “hold accountable all bad actors” that “wrongfully trade off of Nike’s famous brand and dupe consumers into purchasing fake Nike products.” In addition to this case, Nike has filed a number of trademark-centric lawsuits against entities and individuals that it alleged were looking to build businesses on the back of its famous branding. After filing a headline-making suit against MSCHF in the wake of backlash over the Brooklyn-based company’s sale of customized (read: blood-infused) Air Max sneakers, Nike filed suit against a former employee that was customizing – and selling – initially-authentic Nike sneakers without its authorization. That case has since settled. 

Around the same time, Nike initiated a trademark suit against Drip Creationz, which has allegedly offered up unabashedly counterfeit AF1 sneakers, which it advertises as “100% authentic,” while also promoting and selling unauthorized footwear that it markets as handmade “customizations” of Nike’s most iconic products. That case is currently underway in federal court in California, with Nike recently amending its complaint to add new defendants to the lineup. 

And most recently, Nike has taken its trademark enforcement virtual, filing suit against StockX on the basis that the marketplace has allegedly offered up NFTs that amount to “unsanctioned products [that] are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.” 

The case is Nike, Inc. v. La La Land Production & Design, Inc., 2:21-cv-00443 (C.D. Cal.)

Vans has landed a win in the latest round of a trademark battle over infringing footwear in China. In a newly-issued decision, the Wenzhou Intermediate People’s Court upheld the judgment of a lower court, holding that the defendants, including a footwear manufacturer headquartered in Rui’an, are on the hook for copying Vans’ OLD SKOOL sneakers and selling them in “large quantities” despite being busted and fined for selling the infringing footwear on two occasions between 2019 and 2021. Siding with Vans, the appeals court confirmed that consumers are likely to confuse the defendants’ lookalike offerings with those of Vans, and ordered that the defendants permanently refrain from making, marketing, and selling footwear that infringes Vans’ trademarks and pay a sum of 2.7 million RMB ($392,297), which includes punitive damages. 

The case got its start back in June 2021 when Vans lodged a trademark infringement and counterfeiting claims against the main defendant, who was responsible for making/selling the infringing footwear, and three major e-commerce retailers in China, who similarly offered up the lookalike footwear, arguing that they had sold more than 160,000 pairs of sneakers that mimicked the design of its well-known OLD SKOOL sneakers (including Vans’ trademark-protected jazz stripe) between 2018 and 2021, generating 553,581 yuan ($80,558) in the process. With the foregoing in mind, VF Corporation-owned Vans sought injunctive relief and monetary damages. 

The defendants pushed back against Vans’ case, according to Schwegman Lundberg & Woessner’s Aaron Wininger, arguing that, among other things, consumers are not likely to be confused by the allegedly infringing footwear due to a notable variation in the design of the stripe adorning the side of the sneakers and the price points at issue. Specifically, the defendants claimed that the stripe that appears on their sneakers is split at one end, making it “unique” and capable of distinguishing its offerings from those bearing Vans’ solid “jazz stripe” mark. Beyond that, the defendants argued that the price of their sneakers – 20 yuan (almost $3) – is significantly lower than Vans, who’s OLD SKOOL sneakers retail for “more than a few hundred yuan” ($70). 

A Vans sneaker and a copycat sneaker
Vans’ OLD SKOOL sneaker (left) & the defendants’ sneaker (right)

The difference in price means that the two companies are targeting consumers in different segments of the market, the defendants asserted, and so, “the relevant public will not misunderstand the source of the [parties’] goods.” 

Unpersuaded, the Rui’an City People’s Court determined – and the Wenzhou Intermediate People’s Court affirmed – that consumers are likely to be confused as to the source/nature of the defendants’ sneakers. For one thing, the courts held that the products at play “belong to the same [category] of commodity.” At the same time, the courts determined that despite the defendants’ arguments to the contrary, the sneakers and trademarks at issue are confusingly similar, as they are “basically the same in overall composition, line shape, etc.; only the ends of the lines are split, and the overall composition is similar.” Still yet, the Wenzhou court confirmed that the defendants were making use of their stripe “as a logo” in a “clear and conspicuous” manner, and that the stripe “obviously plays a role in identifying the source of the product” in the minds of consumers, and thus, the defendants were, in fact, using the design was a trademark. (As opposed to using it in a purely decorative manner, for instance.) 

As a result, the court held that the allegedly infringing footwear made use of “the same or similar trademarks on the same [types of] goods” and are “likely to cause confusion among the relevant public,” thereby, infringing Vans’ rights in the marks. 

The court also pointed to the “long-term publicity” and “consistent use” of the OLD SKOOL design, including the jazz stripe mark, by Vans in China, which has resulted in a “high” level of popularity and consumer awareness of the brand and its sneakers. (No small share of VF Corp.’s annual revenue comes from the Chinese market, where Vans’ has been building in retail footprint since 2008, boasting 400 points of sale including retail, wholesale, and multi-brand in first- to third-tier cities as of 2014, according to Jing. Vans China Brand Marketing Manager Brian Smith said at the time that the company and its offerings were “well established in first- and second-tier cities,” with such brand awareness likely growing to third-tier cities since then.)

In ordering the main defendant to pay a sum of 2.43 RMB ($353,361) in damages and the retailer defendants to collectively pay a total of 267,561 yuan ($38,936), the Rui’an Court cited Paragraph 1 of Article 63 of China’s Trademark Law, which enables courts to award punitive damages in the event that the infringement is malicious. The court found that was relevant here given that the defendants continued to sell the infringing footwear after being put on notice of the infringing nature of the shoes and penalized for such sales two different times by the Rui’an Municipal Bureau of Supervision in 2019 and 2021. 

(In furtherance of an overarching attempt to crack down on bad faith trademark registrations, China’s Trademark Law was amended in 2019. In addition to the inclusion of new provisions that aim to prevent the registration of marks when the filing-parties lack intent to use such marks, the amended law boosted the maximum allowable level of punitive damages that can be awarded in infringement cases. Amended Article 63, in particular, states that “for malicious infringement of the trademark exclusive right, if the circumstances are serious, the amount of compensation may be determined at more than one time but not more than five times the amount determined in accordance with the above method. The amount of compensation shall include reasonable expenses paid by the right holder to stop the infringement.”)

Upholding the damages award that the Rui’an court awarded to Vans, the Wenzhou Intermediate People’s Court stated that the lower court did not err in ordering “the malicious manufacturers pay a heavy price,” and the award sends a message that courts will “deter potential infringers, vigorously regulate the market competition order, guide the society in respecting property rights, and protect innovation and creation.” 

The win for Vans comes closely on the heels of another headline-making development in a footwear case, in which the Supreme People’s Court of China invalidated the trademark registration that a Chinese individual secured for “Manolo & Blahnik” for use on footwear in China in 2000. In a decision in June, the Chinese high court found that the registrant, who was not affiliated with famous footwear brand Manolo Blahnik, had filed the application in bad faith, benefitting from the fact that China issues trademark registrations on a first-to-file (as opposed to a first-to-use) basis, and thereby, standing to significantly limit the operations of the Manolo Blahnik brand in the Chinese market, despite years of existing operations in other markets and major marketing placement. 

THE BOTTOM LINE: The win for Vans, along with wins for brands like Manolo Blahnik (which is expected to pave the way for the 50-year-old brand to engage in a major expansion effort on the Chinese mainland, as well as in Taipei and Hong Kong), New BalanceMichael Jordan, and Burberry, among others, seem to suggest that while bad-faith filings continue to be a critical challenge for non-native rights holders, Chinese courts are increasingly recognizing the legitimacy of Western companies’ intellectual property rights, which “will help ensure that brands are safeguarded, and consumers’ interests are protected.”

Nike is adding to the list of defendants that it is facing off against in a pending lawsuit over allegedly “customized” footwear. In an amended complaint that it lodged with the U.S. District Court for the Central District of California on August 18, the Beaverton-based sportswear behemoth claims that not only is sneaker customizer Customs By Ilene, Inc., dba Drip Creationz (“Drip Creationz”) on the hook for trademark infringement and dilution, and counterfeiting for offering up modified sneakers, as well as outright fakes that bear Nike branding, affiliated entity Dripz 2.0 is similarly liable, as are the companies’ co-founders and owners Ilene Arellano, Raymond Quiroz, and Brian Porter, who Nike claims are actively trying to “hide their own infringing actions” in light of its lawsuit.

In the newly-filed amended complaint, Nike claims that Drip Creationz has been 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.” 

Southern California-based Drip Creationz – and the other named defendants – do not stop there, though, per Nike. In what is the most interesting aspect of the case, Nike claims that in addition to offering up the unabashedly counterfeit Air Force 1 sneakers, which it advertises as “100% authentic,” Drip Creationz and co. are also promoting and selling unauthorized footwear that they market as handmade “customizations” of Nike’s most iconic products.  The problem, according to Nike, is that in creating the customized footwear, Drip Creationz deconstructs otherwise authentic Air Force 1 shoes and “replace[s] and/or adds materials.” In the process, the defendants “materially alter” the shoes “in ways Nike has never approved or authorized,” thereby, rending them infringing and/or counterfeit. 

Drip Creationz sneakers

Specifically, the Swoosh argues that the defendants’ custom shoes contain “images, materials, stitching, and/or colorways that are not and have never been approved, authorized, or offered by Nike,” including “fake and unauthorized Nike Swoosh designs, as well as third party trademarks and protected images,” such as a pattern that mirrors Burberry’s trademark-protected check, Frito-Lay-owned Cheetos’ Chester Cheetah character, Travis Scott’s Astroworld graphic, and Chick-fil-A’s stylized word mark. 

(Echoing claims that Nike makes in its ongoing case against StockX over NFTs, Nike takes issue with the defendants’ excessive use of elements of its branding and their claims about the authenticity of the footwear, namely, Drip Creationz’s “purported guarantee of authenticity through claims that its products are ‘100% authentic’ Nike products purchased directly through Nike’s website.” Nike alleges that “customers considering purchasing purportedly Nike-branded products from Drip Creationz are, in fact, relying solely on Drip Creationz—not Nike—to guarantee that the products are ‘100% authentic.’”)

With the foregoing in mind, Nike again sets out claims of trademark counterfeiting and infringement, trademark dilution, false designation of origin, and unfair competition in connection with Drip Creationz’s unauthorized use of an array of its trademarks, including its Swoosh logo, which it says is “one of the most famous, recognizable, and valuable trademarks in the world,” as well as its Air Force 1 word mark and trade dress. This time around, Nike claims that Dripz 2.0 is also on the hook for the aforementioned causes of action. At the same time, Nike also asserts that individual defendants – Ilene Arellano, Raymond Quiroz, and Brian Porter – are liable for the activities of Drip Creationz and Dripz 2.0, as they “authorized, directed, and participated in the infringing activities conducted by both Drip Creationz and Dripz 2.0.” This includes procuring counterfeit Nike sneakers, as well as “sourcing the genuine Nike footwear used for the infringing AF1 products.” 

It is especially pressing that the individual defendants be added to the case, Nike claims, as they have “facilitated the sale of the infringing D1 footwear from Drip Creationz to Dripz 2.0 and now own a portion of Dripz 2.0.” This “sale and partial ownership are evidence that the individual defendants are using corporate entities to attempt to hide their own infringing actions,” Nike asserts, arguing that “in such a situation, the Individual Defendants must be party to a litigation to prevent continuing this process of moving inventory anytime a complaint is filed.” 

A screenshot of Drip Creationz website

Nike is seeking monetary damages in an amount to be determined at trial, and injunctive relief to bar the defendants from further nfringing its marks and/or injuring its business reputation, among other things. 

In its formal response to Nike’s initial complaint last year, Drip Creationz argued that its sale of modified sneakers that it purchased from Nike and/or authorized Nike retailers “amount[s] to a resale by the first purchaser of the original product and is, thus, protected under the first sale doctrine and does not constitute trademark infringement or unfair competition.” Counsel for the company further claimed that a critical element is missing from Nike’s complaint, namely, likelihood of confusion, as “there is no likelihood of confusion between Nike’s asserted trademarks and the trademarks and/or usages made by Drip Creationz.”

The case comes as Nike has initiated a growing number of trademark lawsuits against customizers ranging from Drip Creationz and John Geiger to MSCHF and former employee Jeffrey Waskowiak and his company KickRich LLC. The cases have been met with scorn from no shortage of Nike fans, who have accused the sneaker giant on social media of taking customizers ideas and mass producing them, while also benefitting from the culture-building that comes with exercises in customization and potential boosts to the demand for – and thus, the longevity of – silhouettes thanks to the appeal driven by particularly well-done customization projects. 

In terms of what is driving the onslaught of customizer-specific litigation from Nike, a representative for the company said last summer that the company is not aiming to “limit the individual expression of artisans, many of whom are some of the brand’s biggest fans,” and noted that Nike “often collaborates with designers, artists and other creatives to innovate new products and experiences for our consumers with the Nike brand.” Instead, Nike says such litigation is the result of the fact that the brand “cannot allow unauthorized customizers to build a business using and leveraging some of our most iconic trademarks, undermining the value of Nike’s intellectual property,” as well as of its “brand, goodwill, and hard-earned reputation.” In other words, Nike says that it is simply policing its valuable trademark rights in order to maintain that value. 

The case is Nike, Inc. v. Customs By Ilene, Inc., 5:21-cv-01201 (C.D.Cal.)

Nike and adidas have settled a number of matters, including short-lived patent lawsuit, over their respective knitted footwear technology. On the heels of Nike filing suit against adidas in a federal court in Portland last year, arguing that the German sportswear titan made unauthorized use of its “game-changing” – and patent protected – Flyknit technology (which it spent more than a decade and upwards of $100 million dollars researching and developing) for a rival collection of “Primeknit” shoes, the parties alerted the U.S. District Court for the District of Oregon that “they have reached a settlement of the matter in litigation such that the case is dismissed without prejudice,” with each party bearing its own attorneys’ fees and costs. 

Nike first lodged its patent infringement complaint against adidas in December 2021, alleging that in lieu of engaging in innovation, adidas has spent “much of the past decade challenging several of Nike’s patents directed to Flyknit technology,” and has “continued to use Nike’s patented technology without permission.” As a result, Nike claimed that “adidas offers dozens of footwear products that infringe [its] patents, including many of adidas’s so-called ‘Primeknit’ shoes.” In the since-settled case, Nike specifically alleged that adidas was infringing nine of its 300-or-so utility patents for the Flyknit tech “by making, using, offering for sale, selling, and/or importing into the United States footwear products that practice the claimed inventions,” all of which center on “a novel method of designing and manufacturing uppers that allows Nike to use yarns made of recycled materials and to knit the upper to the exact shape necessary.” 

According to Nike’s complaint, “adidas announced its Primeknit shoes five months after Nike announced Flyknit, [and] the industry immediately took note of the similarities between Nike’s patented Flyknit technology and the adidas’s Primeknit offerings.” Instead of seeking a “license to any of Nike’s patents covering Flyknit technology, adidas opted to challenge several of them, all while marketing a number of different infringing shoe styles and following on Nike’s innovation coattails into other sports,” the Swoosh asserted, setting out nine claims of patent infringement and seeking injunctive relief and enhanced damages. 

At the time of filing, adidas pushed back against Nike’s allegations, stating, “Our Primeknit technology resulted from years of dedicated research and shows our commitment to sustainability.”

Nike and adidas knitted sneakers
Nike’s Flyknit (top) & adidas’ Primeknit (bottom)

Prior to the parties’ settlement, the case had been put on hold, with the court granting adidas’ unopposed motion to stay the case pending the outcome of a U.S. International Trade Commission (“ITC”) investigation. On the same day that Nike filed suit against adidas, it also requested that the ITC institute an investigation of adidas based on its “unlawful and unauthorized importation into the United States, sale for importation, and/or sale within the United States after importation of certain knitted footwear products that infringe Nike’s patents protecting its Flyknit technology.” That proceeding – in connection with which Nike is looking to get the federal trade body to block the import of adidas’ allegedly infringing Primeknit footwear – has similarly been settled.

A Separate Squabble

The settlement extends to additional (but related) fights between Nike and adidas, including the patent lawsuit that pitted the sportswear giants against one another for almost a decade over Nike’s U.S. Patent No. 7,347,011, which is the original patent in its “Knitted Textile Upper Family.” Adidas initially filed a petition for inter partes review (“IPR”) in 2013, challenging the patentability of an array of claims in Nike’s and the Patent Trial and Appeal Board (“PTAB”) instituted a review.

The proceedings saw Nike seeking to amend its patent by cancelling the challenged claims (claims 1-46) and adding substitute claims. Pushing back, adidas argued that the substitute claims, which concern “a single flat-knit textile element,” are unpatentable in light of three examples of prior art. While the PTAB granted Nike’s request to cancel the claims, it refused to allow the Swoosh to add the substitute claims due to the prior art, prompting Nike to appeal to the U.S. Court of Appeals for the Federal Circuit. (The appeals court affirmed the PTAB’s findings that the substitute claims are unpatentable and that Nike had the burden to prove the patentability of the substitute claims.)

Fast forward to 2020, and the matter landed before the Federal Circuit again, with Nike taking issue with the PTAB’s determination that its substitute claim 49, which focuses on “a knit upper with apertures for laces made by omitting stitches in the knit,” is not patentable, among other things. (The court made such a decision based not on the previously-cited prior art references but on separate prior art.) Siding with Nike, a panel for the appeals court stated in a decision in April 2020 that the PATB may raise unpatentability grounds sua sponte when reviewing a motion to amend a claim in an IPR proceeding. Specifically, the Federal Circuit held that the PTAB may, in fact, cite prior art or other invalidity grounds not raised by the challenging party (adidas, here), provided it gives the parties notice and opportunity to respond before issuing a final decision. 

As recently as this month, that since-settled case landed back before the Federal Circuit for the third time in nine years, with counsel for Nike arguing that in the face of a challenge from the PTAB, a petitioner (adidas in this case) bears the burden of persuasion. (According to Bloomberg, a panel of judges to the Federal Circuit “seemed skeptical” during an oral argument on August 1 that Nike Inc. “would have saved a patent claim regardless of whether Adidas had the burden of persuasion after [the PTAB] raised its own challenge” to Nike’s patent.)

The cases are Nike, Inc. v. adidas AG, 3:21-cv-01780 (D. Or.); Adidas AG v. Nike Inc, 2:22-cv-00198 (E.D.Tex.); and In the Matter of Certain Knitted Footwear, No. 337-TA-1289 (ITC).

Retail is rife with legal battles that pit industry occupants – from luxury brands to sportswear titans – and their valuable trademarks against one another. With the first half of the year behind us, here is a look at roughly a dozen currently pending trademark lawsuits that are worth keeping a close eye on, as brands clash over the use of their trademarks in connection with the marketing and sale of non-fungible tokens (“NFTs”), Chanel continues to face off against a couple of resale entities, footwear brands wage lawsuits over their trademarks (and trade dress), and celebrities and other big companies are slapped with reverse confusion-focused suits over newly-launched (or in Meta’s case, relatively newly-rebranded) endeavors.

No shortage of these cases are expected to provide guidance for brands and trademark practitioners, alike, with matters that are being waged over the use of marks on virtual goods/services (i.e., in the metaverse) and/or in connection with NFTs, likely to be especially useful in helping to lay the groundwork for future actions in this space.

Hermès International v. Mason Rothschild

In one of the first headline-making lawsuits involving NFTs, Hermès filed a trademark infringement, federal trademark dilution, false designations of origin, false descriptions and representations, cybersquatting, injury to business reputation, misappropriation, and unfair competition lawsuit against Mason Rothschild, the individual behind the collection of 100 MetaBirkins NFTs, early this year. Tied to images depicting furry renderings of its famous Birkin bag, Hermès claims that in furtherance of his sale of the NFTs, Rothschild simply “rip[s] off [its] famous BIRKIN trademark by adding the generic prefix ‘meta,’” which refers to “virtual worlds and economies where digital assets such as NFTs can be sold and traded.”

Rothschild has since argued that his “fanciful depictions of fur-covered Birkin bags and his identification of his artworks as ‘MetaBirkins’ are artistically relevant and do not explicitly mislead about their source or content,” and thus, should be protected from trademark liability by the First Amendment. While the court agreed that the Rogers test should be used to determine whether Rothschild’s use of Hermès’ marks is actionable under the Lanham Act, SDNY Judge Jed Rakoff determined in May that Hermès has sufficiently set out allegations that Rothschild’s use of “MetaBirkins” is not artistically relevant or is explicitly misleading and therefore, fails to meet the Rogers test.

Counsel for Rothschild lodged a memo of law in support of “an immediate interlocutory appeal” in early June, arguing that the case addresses “an issue being closely watched by the press because it is of special consequence to society at large and art markets in particular: whether artists are free under the First Amendment to depict or refer to trademarks in their art, and to describe what they have depicted, without fear of trademark liability.” Hermès subsequently pushed back in a memo of its own.

Reflecting on the case, a rep for Rothschild told TFL, “The judge ruled that MetaBirkins are artistic speech protected by the First Amendment. There are two remaining questions that the judge said need to be addressed. First, is the title “MetaBirkins” artistically relevant to the artwork? In our view the answer is clearly yes—the artworks are illustrations of imaginary fur-covered Birkin bags, and the title MetaBirkins describes what the artworks are about. The second question is whether I’ve made any explicit claim that Hermes is responsible for the MetaBirkins artwork, and again we look forward to showing that I’ve always identified myself as the creator, not Hermes.”

The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).

Chanel v. The RealReal, Chanel v. What Goes Around Comes Around

Chanel’s trademark-centric lawsuits against The RealReal (“TRR”) and What Goes Around Comes Around (“WGACA”) are still underway in the SDNY roughly four years after the cases were filed – with the parties in both cases currently clashing over discovery.

In the enduring trademark and anti-competition lawsuit that Chanel filed against TRR, the brand accuses the resale platform of “selling counterfeit CHANEL handbags, while also “represent[ing] to consumers that it ‘ensure[s] that every item on TRR is 100% the real thing, thanks to our dedicated team of authentication experts,’” and then offering up and selling a number of “counterfeit” Chanel products. Chanel has also taken issue with TRR’s “advertising and marketing practices,” claiming that the reseller “has attempted to deceive consumers into falsely believing that [it] has some kind of approval from or an association or affiliation with Chanel” when no such association exists.

Following a stay in the case while the parties participated in a mediation with the aim of a settlement, counsels for the two companies alerted an SDNY judge in December 2021 that they were “unable to reach a resolution of the matter at this time.” As of July 1, the parties were slated for a discovery hearing, including on whether certain documents should be clawed back as privileged, as Chanel has argued.

Meanwhile, Chanel is still embroiled in the separate – but similar – case that it filed against WGACA. After refusing to toss out the bulk of Chanel’s claims, including its trademark infringement and false association causes of action, a New York federal court ordered that the New York-based reseller provide additional information about its sale of Chanel-branded products. In an order in June, SDNY Judge Louis Stanton ordered WGACA to produce the monthly financial statements dating back to 2018 that its expert used to calculate WGACA’s profits, along with its summary of Chanel-branded product “sales and costs,” along with updated “Google Analytics information, data from Bitly, and internal reports relating to WGACA’s advertising using Chanel’s trademarks” – and the effectiveness of such ads.

Reflecting on the significance of the lawsuits, Foley & Lardner’s Jeffrey Greene and Allison Haugen have stated that the implications “could be broad-reaching, providing guidance to resellers on the parameters of a fair use defense to trademark infringement claims.” They also stand to provide “insights into the validity of antitrust-type claims in instances of claimed interference with the resale market, particularly in connection with Chanel v. The RealReal, as well as how resellers ought to describe the authenticity of the goods they sell.”

The cases are Chanel, Inc., v. The RealReal, Inc., 1:18-cv-10626 (SDNY), and Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).

*This is a short excerpt from an article that was published exclusively for TFL Enterprise subscribers. Sign up for an Enterprise subscription today to gain access to all of our exclusive content.