On the heels of a California federal court issuing a preliminary injunction last month in the trademark infringement and dilution case that Nike filed against Warren Lotas, LLC and its eponymous founder (“WL”), bringing an abrupt halt to the company’s ability to fulfill preorders for its allegedly infringing Warren Lotas X Staple Pigeon OG and Warren Lotas Freddy Broccolini Chanclas” sneakers, the Los Angeles-based streetwear brand claims that the Beaverton, Oregon-based sportswear giant is “trying to convert that narrow victory into a broad injunction.”
In the ex parte application for clarification or reconsideration of the court’s November 18 preliminary injunction order that it filed early this month, WL states that while it “fully intends to comply with the court’s injunction against further sale or promotion of the Warren Lotas X Staple Pigeon OG or Warren Lotas Freddy Broccolini Chanclas” sneakers, it does not believe that the injunction that is slated to apply for the duration of the litigation extends to a separate sneaker that it introduced to replace the allegedly infringing Pigeon and Broccolini styles, which had already been pre-ordered by customers, but were not slated to be shipped by WL until December.
WL contends that on November 23, its counsel “met and conferred with [Nike’s] counsel to discuss the scope and breadth of the restrained acts outlined in the [court’s preliminary injunction] order.” In that meeting, WL claims that Nike’s attorneys revealed that they interpret the court order to mean that in addition to barring WL from engaging in any “further sale or promotion” of the Staple Pigeon and Stussy-esque Broccolini sneakers, WL is also barred from “fulfilling pre-injunction orders” for the replacement Reaper sneaker, which WL asserts is “not a colorable imitation of any Nike trademarks and that has not been challenged by Nike in its complaint or by separate motion.”
Nike views the court’s preliminary injunction order to prohibit WL from “promot[ing] and sell[ing] the Reaper … if the outsole resembles that of the [Pigeon and Broccolini] sneakers (even if any such promotions are done without reference to the [Pigeon and Broccolini] sneakers and without otherwise using the [Pigeon and Broccolini] sneakers in any way to induce sales),” according to WL’s new filing. (Nike previously argued – and the court agreed – that in addition to the Reaper sneaker bearing an allegedly infringing outsole, WL is using that replacement sneaker, as well as a “commemorative lawsuit shirt, pencil and bumper sticker,” to continue to benefit from the initial interest for the Pigeon and Broccolini sneakers, images of which still appeared on WL’s social media accounts as of the time that the court issued the preliminary injunction).
Because the preliminary injunction is “based exclusively on a likelihood of confusion analysis with respect to the purported Nike ‘Swoosh’ trademark,” a similar version of which appears on WL’s Pigeon and Broccolini sneakers, but not on the Reaper sneakers, WL claims that Nike’s reading of the court order to also extend to the Reaper sneaker is too expansive. The company argues that by interpreting the court’s order this way, Nike is drastically expanding the scope, and it is doing so “not to preserve the status quo or protect [its] trademarks from irreparable harm (i.e., confusion), but instead, to decimate [WL’s] business and its relationship with its customers.”
While Nike argued in a November 2 supplement to its preliminary injunction motion that the not-yet-issued injunction should also apply to the Reaper sneaker on the basis that the sole of that shoe infringes its trade dress rights in its “Dunk” sole, counsel for WL asserts that “whether the Reaper infringed Nike’s purported trade dress rights in the ‘Dunk’ shoe was expressly excluded” from the court’s November 18 analysis/preliminary injunction ruling, which “centered on the ‘Swoosh’” logo.
Nike has “not argued that the Reaper infringed [its] rights in its registered ‘Swoosh’ trademark given that the Reaper includes nothing remotely like that mark,” WL argues. Nike also did not argue that “sales of the Reaper should be enjoined under the doctrine of initial interest confusion.” And still yet, WL claims that the Reaper “is a radically different sneaker” than the Pigeon and Broccolini shoes, as “it contains no Swoosh [logo], no panels and stitching that mimic the Dunk trade dress, and has a differently-designed outsole that features the skull and scythe of the grim reaper.”
With that in mind, “Nike’s effort to convert the court’s injunction against the [Pigeon and Broccolini] sneakers into an injunction against an entirely new shoe – where there has been no showing [that] anyone is confused – is inappropriate and warrants an order from the court” to clarify “the scope of the injunction” prior to December 18 when WL is required to submit a declaration confirming its compliance with the injunction.
In addition to a formal clarification as to the limits of the previously-issued injunction, WL has also asked the court to increase the amount of money that Nike is required to put up in case that WL is ultimately found to have not infringed Nike’s rights by way of its allegedly infringing sneakers. As WL’s counsel asserts, “When issuing a preliminary injunction, a court must require that the ‘movant give[ ] security in an amount … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined.’”
To the extent that its request for clarification and reconsideration is denied, and thus, that the preliminary injunction is deemed to extend to the Reaper sneakers, WL says that it “respectfully requests that the bond be increased to adequately protect [its] interests should the court later find that [WL was] improperly restrained.” As of now, the bond amount that Nike has been required to post in connection with the injunction is $10,000, but given that it “currently has approximately 7,000 unfulfilled preorders for the Reapers, which at $300 per unit, represents approximately $2,100,000 in revenue once the Reapers are shipped,” WL claims the bond amount “must be increased substantially.”
If it is “prevented from fulfilling these orders,” WL claims that “it stands to lose $2,100,000 in revenue should it later be determined that the injunction was wrongful.”
WL’s filing comes almost two months after Nike first filed suit against it for offering up lookalike sneakers without Nike’s authorization. WL has since argued in its answer that Nike’s claims are barred by a number of defenses, including waiver, estoppel, and acquiescence, as famed 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.”
*The case is Nike, Inc. v. Warren Lotas and Warren Lotas LLC, 2:20-cv-09431 (C.D.Cal.).