Cute or Canceled? Inspiration vs. Infringement

Last week, Nike and artist collective MSCHF reached a settlement in Nike’s lawsuit over the limited edition “Satan Shoe.” Nike claimed the 666 pairs of modified Air Max 97s infringed upon the NIKE and Nike Swoosh design trademarks. In 2019, MSCHF released a “Jesus Shoe” but didn’t draw the wrath of Nike’s lawyers. What’s the difference between the 2 drops? The association with the devil? Lil Nas X? The musician’s co-sign inspired enough public backlash to reach the corporate level. This case brings up interesting questions around intellectual property and artistry. Culture is constantly sampled, upcycled, remixed, and appropriated. How does the law delineate between whitelisted original works and blacklisted copies? The answer is anything but clear cut. 

Derivative vs. Transformative

A derivative work is a work based on one or more already existing works. Only the owner of the original copyright has the right to authorize someone else to create an adaptation or derivative of that work. A transformative work uses copyrighted material in a way that is different enough for the new work to be  copyrightable on its own or considered “fair use." Fair use means the way the new work uses the original work escapes the reach of the original work’s copyright protection and is not infringement. How do you determine the difference between derivative and transformative? That’s the gray area that is forever evolving. The courts use a factor test to determine if a work is transformative enough and, therefore, fair use:

1. The purpose and character of the use: if the use is not for profit, educational or noncommercial, courts may be more likely to find the use fair.

2. The nature of the copyrighted work: how is the original work used? How does this relate to copyright’s purpose of encouraging creative expression? Use of more imaginative works (like a novel, movie, or song) is less likely to be considered fair use than use of factual works (like a technical article or news item).

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole: the more of the original work used in the new work, the less likely the courts will see it as fair use. However, even if you use a small amount, if its impact is substantial, it might not be fair use.

4. The effect of the use upon the potential market for or value of the copyrighted work: will customers think the new work is the original work? will the new work harm the market value of the original work? That’s what we saw here in the Satan Shoe case.

As we’ve seen time and time again, these guidelines are muddy. Courts determine fair use on a case-by-case basis.

Customer Confusion 

When it comes to trademarks, the key question is “likelihood of customer confusion.” A likelihood of confusion exists when consumers think the infringing mark is officially connected to or authorized by the original trademark owner. The trademark office also uses a factor test to determine this likelihood:

1. Strength of the original mark: how long have they been in business? How well known are they? The stronger the mark, the more likely for confusion.

2. Relatedness of goods or services: even if two products are using the same name, it is less likely customers will be confused if they are totally different products, e.g. Dove Chocolate vs. Dove Soap.

3. Similarity in appearance: marks can be confusing when it comes to their look and design.

4. Similarity in sound: do the marks phonetically sound the same, even if spelled differently?

5. Similarity in meaning: even if two marks are identical in look and sound, they might still be completely different in their commercial impression.

6. Evidence of consumer confusion: have buyers purchased products with the new mark? Is there proof they thought they were buying the original?

7. Marketing channels: how is the alleged infringer advertising their product or service? Are they going after the same market as the original?

8. Sophistication of the buyer: If the product is targeted to the masses instead of a niche informed audience, the more likely the confusion.

9. Likelihood to deceive: is the alleged infringer trying to confuse customers? (think bootleg designer or fake Kylie lip kit).

In the case against the Satan Shoe, Nike included online commentary from fans outraged with Nike’s mistaken approval of these blasphemous kicks. Because of online backlash, Nike could prove not only did customers think the pair was an official release, but it could affect sales (#boycottnike).

Do Your Homework

If your practice involves using source material, like collage, sampling, or upcycling, be aware of your risk for infringing. Some points to consider in drawing your own lines between inspiration and infringement:

• Do your research. Conduct a trademark, copyright, and Google search before deciding on your brand’s name or using source materials. See what’s already out there in your industry or market before committing to a name, visual identity, or considering a work finished. An attorney can assist with an in-depth search.

• Read the fine print. Some copyright owners have Terms of Use on their website explaining if and how their work can be used. Read these terms carefully. The owner may license their work for a fee or allow the use if they are properly credited.

• Exercise your rights to Fair Use. Under Fair Use laws, you can use a work for non-commercial purposes without securing rights in some cases. Go through the factor test. If you’re unsure, ask an attorney. Keep in mind that just because you claim Fair Use, doesn’t mean you won’t get sued. It’s an affirmative defense, so you’d have to defend your claim in court for it to be considered Fair Use.

• Push yourself creatively. If you think your work and another are too similar, other people might to. Hone your craft. Cultivate your style. If flirting with the line between derivative and transformative is the point of work, develop the way you talk about your practice to make the satirical intent and commentary clear.

• Use the Public Domain. Materials with Creative Commons licensing are free to use and can be found here.

Weigh The Risk

 At the end of the day, it boils down to how much risk you’re willing to take. As soon as you create an original work, you are entitled to certain rights of protection under the law. The difficulty becomes enforcing those rights. Even if you trademark or copyright your work, it is your responsibility to enforce your rights as the owner. On the flipside, if you’re making work that samples or remixes, it may not be legal, and we can't advise you to try, but you might not face legal consequences unless the owner of the source material enforces their rights. Say you’re upcycling Nike shoes, selling them for $400 a pop, and sell a few pairs. Does Nike know you exist? Will Nike come for you? Maybe it's not likely, but keep in mind if they do, they are a multi-national corporation with infinite resources, an experienced legal team, and copyrights and trademarks registered as far back as the 1970s.

 On the other hand, if you’re doing something with enough reach to call out the big dogs, you’re probably doing something right when it comes to your brand. All press is good press, and the court of public opinion holds increasing power. As MSCHF put it so well in their statement responding to the Nike suit, better to reign in hell than serve in heaven 😈