Sneakerhead SOS: Will Those New Adidas Get You Sued?

May 30, 2014 • Fashion

Ever heard of mi Adidas? If not, it’s an Adidas feature that allows you to customize a pair of shoes. Currently, you can customize things like color, material, and can add embroidery a pair of shoes. But soon enough, the mi Adidas feature will also allow you to upload an image and apply it to a selected model of shoe. There’s no doubt that some interesting (and unfortunate looking) shoes will result. What has really peaked our interest related to the German corporation’s endeavor, though, is what happens if someone uploads, say, a trademarked logo to put on their shoe. Let’s say someone wants a pair of Adidas sneakers covered in Chanel’s interlocking “C” logo, is that a problem?

The first thing to consider in this scenario is direct trademark infringement. And what it really comes down to is one question: Is a consumer likely to be confused as to the source of the shoes or as to the sponsorship or approval of the shoes? (In this scenario, the consumer is likely an individual who sees the shoes on someone else after they have been created; this type of confusion calls under the doctrine of Post-sale confusion). As Designer x Athletic Brand collaborations are becoming more and more popular, the answer to the consumer confusion question gets less clear. It used to be that you could say with near certainty that a luxury brand was not working with the likes of Nike and Adidas on shoes, but that’s not the case anymore. So, in our opinion, there’s a stronger argument to be made now that a consumer could reasonably assume there’s a collaboration or sponsorship at hand.

Federal law primarily governs trademark law, so the variable that can make infringement cases unpredictable is the judge. It might be that a judge doesn’t think that users uploading images and putting them on a shoe would amount to consumer confusion. Or, as in a recent case, a judge could go the other way.

In 2012, Ohio State University (OSU) sued Skreened, a t-shirt company, and its owner, Daniel Fox. Skreened allows users to upload images of their choosing to be printed on apparel. The problem was that users were uploading trademarks owned by OSU. After warnings were ignored, OSU sued for trademark infringement. Skreened’s stance was that it was not liable since it was the users who were uploading the infringing images and it was argued that it was nearly impossible to police every uploaded image.

U.S. District Court Judge Gregory Frost was not impressed with the t-shirt company’s arguments. “Selling knockoffs is selling knockoffs, regardless of who suggested you sell them, regardless of how many other infringing products you decide not to sell, and regardless of how much of a hassle it is to comply with the law,” Frost said in his ruling. The judge went on to say, “even if they [Skreened] had not received such notice, no reasonable person would have thought that selling T-shirts with identical marks to those licensed and held by (OSU) was reasonable.” Essentially, Frost would not allow Skreened to pass the blame simply because it was the users who were uploading the infringing images.

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Another claim that would surely be brought if Adidas were summoned to court is contributory trademark infringement. The United States Supreme Court stated the test for contributory infringement in its 1982 decision inInwood Labs., Inc. v. Ives Labs., Inc. As established in Inwood, “if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit.”

The oft-mentioned Tiffany v. eBay case established that online marketplaces do not bear the primary burden when it comes to policing for trademark infringers and counterfeit products. The gist of the case is this: Tiffany wasn’t pleased that counterfeit Tiffany goods were being sold on eBay. Tiffany notified eBay that this was happening and when the response wasn’t what was desired, the two parties found themselves in court. The core of the case centered on whether or not the notices from Tiffany were enough to meet the Inwood standard of “knows or has reason to know”. The Court of Appeals for the Second Circuit found that eBay’s generalized knowledge of counterfeit products was insufficient. The problem for Tiffany was that it had not identified specific instances of counterfeit goods being sold, and when it did, eBay suspended those sellers.

So how could this play out in an [Insert Brand Name here] v. Adidas suit? Well, if Adidas is not given notice of infringing goods or the notices are not specific enough, the company could argue à la eBay that it did not have the knowledge required by Inwood to establish contributory infringement.

It might be that no one wants a pair of Adidas shoes with the LV mark or the interlocking “C” logo, but stranger things have certainly happened in fashion. An Adidas spokesperson tells us that there will be “protections in place to guard against IP infringements” and that the company will ”implement a filter, reserve the right to reject any order, and require the user to sign our terms & conditions and confirm that their image upload does not violate third-party intellectual property.” Should the German company find itself in court, that would likely be something it would rely on. Whether that would be persuasive is not as clear, though, as both eBay and Skreened have similar users agreements in place and clearly that did not save them from a day in court. ​

JENNIFER WILLIAMS is a recent law school graduate who writes about fashion, the legal avenues available for protecting it, and the ways in which the laws are falling short. For more from Jennifer, follow her on Twitter.

This post was reprinted with permission from The Fashion Law.

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