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This month we discuss trademark lawsuits against Peloton, Lil Nas X “Satan Shoes,” COVID-19 StarMed testing clinic, and many more…

World Champ filed a trademark infringement suit against Peloton

On April 30, 2021, World Champ Tech LLC (“World Champ”) filed an action in California Federal Court against Peloton alleging infringement of its BIKE+ trademark.

In 2014, World Champ founders’ professional cyclists, James Mattis and Ted Huang developed “Bike+,” a fitness app permitting users to detect, record, store, analyze, and share data from their indoor or outdoor cycling sessions. The BIKE+ mark was registered on 2015.  Peloton launched its Peloton’s Bike+ in late 2020, giving Peloton’s users the ability to control their bikes’ features remotely.

In December 2020, World Champ sent Peloton a letter requesting Peloton to cease and desist use of the mark BIKE+, but Peloton nonetheless refused to stop marketing the new bike line.

Peloton is also facing a patent infringement suit over its new Bike+ products in Delaware Federal Court, where competitor Icon Health & Fitness argues that Peloton copied its technology.

Nike Settles Dispute with Lil Nas X Collaborator over “Satan Shoes”

Last month, Nike announced that it settled a two-week old trademark lawsuit against MSCHF Product Studio Inc. (“MSCHF”), a Brooklyn art collective behind the highly controversial “Satan Shoes.”

In collaboration with ‘Old Town Road’ rapper Lil Nas X, MSCHF released 666 pairs of the shoes on March 29, 2021. The sneakers, which were modified versions of Nike’s ‘Air Max 97’ sneaker, featured a bronze pentagram, inverted cross and, reportedly, “one drop of human blood” in the sole of every shoe.

Following the release, Nike quickly sued MSCHF in a U.S. district court in Brooklyn, alleging that MSCHF’s sale of the Satan Shoes damages its trademarks, business reputation and goodwill with its customers, some of whom called to boycott the brand for endorsing Satanism.  Nike also put out a statement distancing themselves from the controversial design, stating that Nike did not “design or release the shoes, nor do we endorse them.” Alleging that MSCHF had engaged in trademark infringement and dilution of its mark, Nike pointed the court to instances of actual consumer confusion.

Within days of the filing, Nike secured a temporary restraining order preventing the sale of further Satan Shoes; however, not before MSCHF sold 665 of the 666 released pairs.  MSCHF denied any damage to Nike’s trademark caused by the Satan Shoes, which it called “works of art” protected by the First Amendment.  MSCHF also commented on the publicity garnered by the lawsuit, but seemed happy to put the matter behind it, acknowledging that the settlement would allow it to focus on other artistic endeavors.

As part of the settlement, MSCHF agreed to issue a voluntary recall of the Satan Shoes, along with an earlier-released design called “Jesus Shoes”—also adapted from Nike Air Max 97— and to buy the shoes back from any customer for a full refund of their purchase price.

The case is Nike Inc. v. MSCHF Product Studio Inc., Case No. 1:21-cv-01679, in the U.S. District Court for the Eastern District of New York.

Walmart Opposes Kayne West’s Application for New Yeezy Logo

On April 21, 2021, Walmart filed a Notice of Opposition with the Trademark Trial and Appeal board against Kayne West’s intent to use trademark application for the new logo design for his brand, Yeezy. The logo consists of eight dotted lines “arranged at equal angles as rays from a sun,” and would cover modular homes, musical sound recordings, apparel, retail store services, and hotel services. In its opposition, Walmart claims that the similarities between the new Yeezy logo and its own “spark” logo are “likely to cause confusion, mistake, and deception,” as to whether the two brands are associated with one another. Walmart argues that Yeezy’s logo is in the same general shape as its “spark” logo, but is expressed in dots rather than solid marks. Walmart further stated that consumers are likely to be confused because Walmart often collaborates with celebrities for special lines of products, citing its partnerships with Kendall and Kylie Jenner, Ellen DeGeneres, and Sofia Vergara. Walmart argues that it began using its “spark” logo in 2007, and that Yeezy’s logo would dilute the “distinctive value” of its well-known “spark” mark.

Citing Questionable Litigation Conduct, CT District Court Refuses to Award Romag Fasteners Infringer’s Profits

Despite successfully appealing to the U.S. Supreme Court (SCOTUS) and getting a ruling in its favor, Romag Fasteners has not succeeded in getting a large award of profits.  Instead, a Connecticut district court judge ordered Fossil to disgorge a mere $90,000 in profits.

Romag initially sued Fossil for infringement in 2010, but was refused a $6.7 million award of Fossil’s profits because the case law at the time limited an award of profits to cases where the infringer was shown to have acted willfully. Last year, SCOTUS overturned the court’s decision, ruling that a trademark owner did not need to demonstrate that an infringer acted willfully in order to recover the infringer’s profits, and that the Lanham Act does not impose such “inflexible preconditions” regarding willfulness. SCOTUS nonetheless advised lower courts to place substantial weight on the infringer’s mindset when awarding profits.

The Connecticut court found that Fossil had, at best, acted negligently in using the counterfeit fasteners and blamed Romag for not seeking statutory damages, which it stated would have provided a sufficient remedy.  The court limited Romag’s damages to actual damages of $90,000 which, with other monetary remedies, brought Romag’s damages up to just over $130,000.

The case is Romag Fasteners Inc. v. Fossil Inc. et al., Case No. 3:10-cv-01827, in the U.S. District Court of Connecticut.

Skittles’ maker filed a trademark infringement suit against a Cannabis company

On May 3, 2021, Skittles’ maker the Wm. Wrigley Jr. Co. (“Wrigley”) filed an action in Illinois Federal Court against a cannabis company, Terphogz LLC (“Terphogz”) alleging that Terphogz’s “Zkittlez” mark and marketing strategy is infringing its well-known SKITTLES trademarks and TASTE THE RAINBOW slogan.

According to the complaint, “Wrigley commenced this action to protect the public from Terphogz’s deceptive and dangerous business practices and to safeguard the goodwill and reputation of Wrigley’s renowned SKITTLES Marks.”

Wrigley’s brought against Terphogz claims for trademark infringement, false designation of origin, unfair competition, trademark dilution and cybersquatting under federal law and claims for deceptive trade practices, trademark infringement, false designation of origin, unfair competition and dilution under Illinois law.

North Carolina COVID-19 Testing and Vaccination Site Can Remain Open after Defeating TM Claims

On April 8, 2021, the North Carolina Business Court issued an order denying Star Medical Clinic, PLLC’s motion for a preliminary injunction seeking to enjoin StarMed Urgent + Family Care, P.A. from operating its facilities in three counties in North Carolina. StarMed is a COVID-19 testing and vaccination clinic that focuses on historically underserved communities, and is under contract for those services with the North Carolina Department of Health and Human Services. In February, Star Medical filed common law trademark infringement claims against StarMed, claiming that the “star” in its name predated StarMed’s use of the mark, and that StarMed was creating customer confusion. StarMed argued that the harm to the county residents that would occur by ceasing it’s testing and vaccination services would grossly outweigh any common-law trademark rights Star Medical may have in the mark.

StarMed also relied on the novel argument that because StarMed was acting as a contractor for the state of North Carolina, it was entitled to sovereign immunity, like the state itself. In the order, the Court ruled that Star Medical failed to show that it was likely to succeed on its claims, failed to demonstrate valid common-law trademark rights, failed to offer evidence that it had been irreparably harmed. The Court also found that Star Medical’s knowledge of StarMed’s activities for almost a year before bringing the suit suggested that any harm to Star Medical’s reputation and goodwill was not irreparable. In the order, the Court did not comment on the sovereign immunity argument. The Court ruled, “In sum, plaintiff has failed to carry its burden to show a likelihood of success on the merits and a likelihood of irreparable harm, and it is not entitled to the extraordinary remedy of a preliminary injunction.”

Dunnington Bartholow & Miller Trademark Bulletin Committee: Olivera Medenica & Donna Frosco (Partners); Sixtine Bousquet, Betsy Dale & Kamanta Kettle (Associates).

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