News & Insights

While much of the emphasis of the past (Easter) week has been on the divine, a more infernal matter has been bubbling away in the US.  It’s a devilish story that manufacturers would be wise to watch if others are modifying their products.

Montero Lamar Hill, better known by his stage name Lil Nas X, has been collaborating with the art collective MSCHF to produce a range of what has been dubbed “Satan Shoes”.  The 666 pairs of “Satan Shoes” are genuine Nike Air Max 97 sneakers that have been heavily modified by:

• the addition of an inverted cross, pentagram and the Bible reference “Luke 10:18”;
• the addition of the “MSCHF” trade mark in vertical script at the back of the shoe; and
• the insertion into the air cushion of 60 cubic centimetres of red ink and reportedly a single drop of human blood.

Apparently sneaker customisation is a thing.  In this particular instance, it has drawn the ire of Nike, which has sued in the US District Court for trade mark infringement as the shoes retain its ubiquitous Swoosh logo.

It has been reported that at this point in time, Nike has succeeded in obtaining a temporary injunction barring MSCHF from fulfilling any more orders.

trade mark infringement

 While the actual legal dispute is happening in the US and there is plenty of commentary analysing the case from a US legal perspective, it is always interesting to consider these sorts of issues under Australian law.  What would the position be if this had all occurred in Australia?

 Infringement under section 120

Under section 120(1) of the Australian Trade Marks Act 1995, a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with or deceptively similar to that registered trade mark, in relation to goods or services in respect of which the trade mark is registered.

Nike’s Swoosh logo is registered as a trade mark in relation to athletic shoes and the “Satan Shoes” bear that trade mark.  So is that infringement?  Under section 122A of the Trade Marks Act, an infringement does not arise under section 120 if reasonable enquiries conclude that the trade mark was applied to the goods by or with the consent of the registered owner or an authorised user of the trade mark.  Being genuine Nike Air Max 97 sneakers, this was the case.  So game over for Nike?

Infringement under section 121

Not quite.  An infringement can also arise under section 121; importantly the section 122A defence cannot be applied to section 121.

Section 121 allows a trade mark owner or an authorised user to apply a notice to goods or their packaging prohibiting certain acts in relation to those goods.  Those acts include, under sections 121(2)(d) and (e):

• applying another trade mark to registered goods or using another trade mark in physical relation to them;
• if the trade mark has been applied to registered goods or used in physical relation to them – using on the goods, or on the packaging or container of the goods, any matter that is likely to injure the reputation of the trade mark.

An infringement occurs if a person is the owner of the goods and does to them (or authorises someone to do) one of the things that is prohibited by a section 121 notice.  However an infringement doesn’t occur if the person acquired the goods in good faith without being aware of the notice (such as if it has been removed by an earlier reseller).

It is clear that MSCHF did an act covered by section 121(2)(d) in applying its “MSCHF” trade mark to the goods.  It arguably also did a section 121(2)(e) act, by applying symbols that associate Nike with Satanism – that is something that Nike is also arguing in the US, though obviously not under section 121(2)(e).

other options for Nike

It is worth mentioning that Nike may also have remedies under section 29(1)(g) of the Australian Consumer Law, on the basis that MSCHF and Lil Nas X have made false or misleading representations that their shoes have the approval of Nike.  Or under section 29(1)(h) on the basis that MSCH and Lil Nas X have represented that they have the approval of or an affiliation with Nike.

This type of argument is very much dependent on the facts and how the shoes have been represented and promoted.  It is beyond the scope of this article.

lessons for manufacturers

The lesson for manufacturers who are concerned with their products being modified, repackaged or rebranded is to consider utilising section 121 of the Trade Marks Act 1995.  This will require a notice to be applied to the goods or their packaging, so some foresight is required.

The Macpherson Kelley intellectual property team can advise manufacturers on how to utilise section 121 to protect their products.