Commentary: Has Nike’s Trademark Hegemony Gone Too Far?

Nike, Inc.’s intellectual property (IP) dealings have been subject to considerable public scrutiny, particularly during this past year, following the MSCHF and Lil Nas X “Satan Shoes” scandal. It is evident that Nike has invested colossal resources towards its branding, through legal means, as evidenced by its strong influence and visibility. However, in light of Nike’s current IP legal proceedings, it is worth  considering whether the global brand’s trademark hegemony has gone too far, particularly in the context of freedom of speech and competition.  

Fundamentals of Trademarks

Trademarks are signs which help to distinguish the goods or services of a business, and they are protected by IP rights. Generally, trademark owners (like Nike) utilise trademarks to combat economic, financial and social losses which may occur from pre-emption, competition and imitation.

Unlike other forms of IP, such as patents (which are limited to twenty years), trademarks are infinite unless they cease to be distinctive. This develops significant implications for the legal recognition of trademarks, as they can potentially last forever as long as the owners maintain their duties in policing the trademark and use it consistently. Consequently, this endows  disproportionate benefits to large corporate actors, who have the resources to maintain their trademarks.  

It is also worth highlighting that IP rights generally need to be registered in every country where operations are carried out. This is not an issue for Nike, evident by the 19,500 patents which the corporate giant possesses globally (Investor’s Business Daily, 2016). 

Nike’s Trademark Saga

Over its lifetime, the global powerhouse has had countless legal proceedings in pursuance and protection of its IP rights. In the past six months, three of these proceedings have been heavily publicised. 

In late March, the art collective MSCHF launched a series of modified Nike Air Max 97 shoes in collaboration with music artist, Lil Nas X, and the release became scandalous due to the satanic design of the product. Although the launch initially instigated controversy, Nike’s subsequent (unexpected) lawsuit dramatically amplified the matter. The lawsuit was filed due to MSCHF’s alleged trademark infringement, false designation of origin, trademark dilution, and unfair competition – but a settlement between the actors resolved these matters. It is also interesting to note that MSCHF also released modified Nike shoes with Jesus-imagery at the same time, but faced no legal repercussions following the launch, and if Nike had not settled with MSCHF, this would have been significant detail in the court proceedings. 

Nike is also in a dispute with Puma SE over the term “footware”, which refers to technology-powered footwear. For over two years now, Puma has been attempting to block Nike from registering the term as a trademark but has (thus far) failed to do so  with the UK Intellectual Property Office dismissing Puma’s opposition. Concurrently, proceedings are currently underway in the US, but it is likely that the same result for Nike will be achieved. 

Additionally, Nike had strengthened its IP portfolio by finally receiving a trademark and patent for the Air Jordan 1, which were initially released in 1985. Strikingly, the application for this trademark (and numerous others) were devoid of the “Swoosh” symbol, thereby enabling Nike to pursue expansive protections. As this trademark has been granted through silhouette alone, many worry that this protection is at the detriment of smaller, independent business owners, as more of these smaller businesses will now be cautious and deterred from conducting operations in this sector, to avoid being sued like MSCHF.

Is Nike Gatekeeping?

One of the primary aims of trademark law is to protect the public from deceptive trade practices, but the manner in which Nike is pursuing trademark registration actually appears to be at the detriment of both the public and trade practice itself. 

In the MSCHF proceedings, freedom of speech  was brought to the fore as an issue in this sector. Nike was not particularly concerned with the sale of modified models of their (already purchased) products, rather it prefers to focus on policing the design of the product when it doesn’t serve its brand image. However, freedom of expression is protected by the First Amendment (of the US Constitution), and although it is not certain, there is no guarantee that, had there been no settlement, Nike would have won the legal proceedings. In addition to Nike’s  omission to launch proceedings against MSCHF’s Jesus shoes, in similar legal proceedings, US courts have sided with the artists. For instance, in 2000, the 9th Circuit Court rejected Mattel’s trademark infringement and dilution claims against music band Aqua’s song, “Barbie Girl”. Therefore, from an external perspective, it appears that a global corporation (Nike) strong-armed a smaller enterprise (MSCHF, an artist collective) into submission, through a settlement. 

The Puma proceedings are also worrying, as Nike’s success (at least in the UK) results in a generic term being registered, thus disregarding the concept of product distinctiveness. This could facilitate  Nike to monopolise the whole sector (footwear incorporated with technology); other actors would be prohibited from entering the sector, thereby eliminating competition, which would be  at the detriment of the public, as it hinders product diversity and consumer bargaining power. In addition to Nike’s recently granted Air Jordan 1 IP rights, the legal landscape for smaller and independent businesses is also worrying. Effectively, Nike has secured a global IP portfolio which has a stronghold, and operative monopoly, over the athleisure and sneaker industry. 

However, Nike’s trademark hegemony is not being passively accepted, as Puma continues to oppose the “footware” trademark, and New York City attorney, Robert Lopez, has recently filed a countersuit against Nike, alleging that the brand committed fraud in its trademark filing. The argument that Nike is deserving of its IP rights, due to the resources invested towards achieving them, is severely lacking, as public interests always need to be balanced, and this is absent, arguably due to the lack of harmonisation of IP legal regime globally.