Nike Fires Warning Shot to Sneaker Artists With Trademark Suit

July 22, 2024, 9:02 AM UTC

A sneaker artist known as “The Shoe Surgeon” built a customization empire denoted by collaborations with global brands like Nike Inc., Gucci, and Adidas AG and a cult-like social media backing with a million followers. Justin Bieber, Drake, and Odell Beckham Jr. all donned his customized shoes and he’s even started an “academy” where students pay up to $5,000 to learn the craft of shoe personalization.

But Nike has now accused Dominic Ciambrone’s growing business of an illegal scheme fraught with counterfeits and unauthorized collaborations with brands like Jack Daniel’s, eBay Inc., and Ruffles. The iconic brand sued him on July 15 seeking $60 million for trademark infringement and counterfeiting.

The lawsuit against an artist, especially one Nike once commissioned to create a pair of sneakers for LeBron James encrusted with 24 karat gold and $100,000 worth of diamonds, should serve as a warning shot to other sneaker customizers to tread carefully in their work, intellectual property attorneys say.

“This is about a pair of cultural movements—the movement of customization, but also the resurgence of logo mania and brand tribalism that are coming together in a way that is finally at loggerheads,” said Susan Scafidi, a professor at Fordham University School of Law.

Nike’s trove of intellectual property includes over 250 US trademark registrations and applications, according to the US Patent and Trademark Office database. The shoe customization market is becoming a “big business,” Dorsey & Whitney LLP partner Fara Sunderji said, adding that Nike is making an example of Ciambrone because such misuse threatens its reputation. Ciambrone is accused of exploiting more than 30 of Nike’s trademarks.

“They almost have to take action because of the volume of infringement,” Sunderji said.

Some members of the fanatic sneakerhead community are raging at the brand for going after a well-known artist, but Nike carefully crafted the language in its complaint and public statements to clarify that it’s protecting the brand they admire, said Tiffany Ferris, a partner at Haynes and Boone LLP. And it appears to be working, she said, pointing to comments on an Instagram post made by Ciambrone the day the lawsuit was filed.

“He makes copies of trademarked shoes how hard is it to understand,” one said, adding, “if his ‘original shoes’ didn’t have the Nike logo and colorways and Nike silhouettes no one would buy them joints.”

“The comments on this post are scathing” against The Shoe Surgeon, she said. “They’re clearly from lay people, they’re misusing a bunch of intellectual property terms, but they get the point.”

The Shoe Surgeon's allegedly unauthorized collaboration with eBay.
The Shoe Surgeon’s allegedly unauthorized collaboration with eBay.
Source: Court documents.

Collaborator to Competitor

Nike sued Ciambrone, two “Shoe Surgeon” entities, and his business partner Dallas Imbimbo, accusing them of running a widespread trademark infringement scheme by selling counterfeit shoes, inking collaboration deals using Nike’s marks, and running an “academy” teaching people how to make fake Nikes from scratch for $3,000-$5,000.

The defendants started as “small operations” doing bespoke sneaker customizations around 2016 or 2017, according to the complaint. Nike said it didn’t interfere with those limited commissions. Instead, Nike “actually recognized Ciambrone’s talents” and hired him multiple times from 2017 to 2023 to customize shoes. Those agreements put The Shoe Surgeon on notice that Nike’s permission was required to use its marks to customize and sell Nike products in any quantities, it said.

“We valued our relationship with the Shoe Surgeon and do not have any issues with the limited, one-of-one customization” allowed under contracts, Nike said in a statement on July 18, adding that there were unsuccessful attempts to resolve the matter outside of court. Defendants were “playing a shell game” by temporarily removing infringing shoes from their website only to sell them through alternate channels, Nike said.

Ciambrone also faces a federal trademark infringement suit brought by Goyard St-Honore SAS in June over Nikes he altered using the French brand’s logo.

Nike’s filed similar lawsuits against MSCHF Product Studio for its Lil Nas X “Satan Shoes” and Drip Creationz for customizations including Flamin’ Hot Cheetos Air Force 1s. In both cases, the parties settled.

But neither case involved a sneaker-making academy nor a prior relationship, which attorneys say distinguishes this lawsuit.

“I don’t believe we’ve ever seen a defendant take it to this extreme,” said Nadya Davis, a partner at Holland & Hart LLP.

“It’s a dream to collaborate with legendary brands,” the Shoe Surgeon said in a statement that was also postedto Instagram.

“We are confused Nike has chosen litigation over a discussion, but we are confident with proper dialogue and collaboration we can resolve this with the new management team and turn it into a win for the culture,” the statement said.

If the parties don’t resolve the issue and the case proceeds, Ferris and Sunderji both said they expect The Shoe Surgeon to raise a first sale doctrine defense, which allows an individual who bought a product legitimately to resell it and not be held liable for infringement. But the argument is weak, they said, if The Shoe Surgeon actually manufactured fake “Nike” shoes from scratch and materially altered others, as the complaint claims.

“The doctrine is limited by whether the party who’s making the second sale, if you will, is materially altering the product,” Sunderji said.

The Shoe Surgeon could try a First Amendment defense as well, but Davis said it’s unlikely he could pass the customized sneakers as a form of free speech-protected expression. The company’s actions may not pass the Rogers Test, which allows the use of trademarks in expressive works if it’s artistically relevant, she said. The test has been applied by the US Supreme Court in recent rulings like Jack Daniels Properties v. VIP Products.

It’s one thing to make customized shoes for sneakerheads who may not even wear them, but the reputational risks are even higher if unsanctioned customs make their way to athletes.

“Imagine the shoe falls apart and the athlete sprains his ankle,” said ArentFox Schiff LLP chairman Anthony Lupo.

Confusion is more likely when consumers know brands have partnered before, so Nike’s infringement arguments are fortified by its previous collaborations with The Shoe Surgeon, Lupo said.

“That’s the distinctive factor,” he said, “because they’ve gone out in agreement that there’s a collaboration, so now there’s a heightened duty on the infringer, for lack of a better term, to differentiate themselves from Nike.”

Ciambrone’s actions illustrate what can happen when a collaborator goes rogue, even if a brand tries to limit what a partner can do after the relationship is over, said Crowell & Moring LLP partner Preetha Chakrabarti. Brands can trip themselves up with special, high end, one-off commission projects, like Nike has done with The Shoe Surgeon, Dior, and Louis Vuitton, she said, because others will think they’re allowed to do it too.

Warning to Customizers

Customization services and counterfeits are easier than ever to access on the internet and social media, with a search for “custom Nikes” on the e-commerce site Etsy returning over 1,000 results, and social media influencers often shilling dupes of brand-name products.

Most customization is probably illegal, Sunderji said, but it takes a fact intensive inquiry to determine whether a product has been so materially changed that it’s no longer considered an authorized product.

She pointed to the MSCHF case as an example. “You are altering the shoe specifically because you’re injecting blood into the sole of the shoe and affecting the integrity of the shoe,” she said.

Even smaller customizers are likely on Nike’s radar, she added, but enforcement usually comes down to how much infringement is tolerable.

“It is taking away the market for genuine collaboration and then making their own Nike Dior collaboration,” Sunderji said, adding that it could devalue the genuine products.

Source: Court documents

At the same time, Nike must be careful to not alienate consumers who seek customizations out of love for the brand, Chakrabarti said. She pointed to the NFL as another example of a strong, protective brand, and said they likely don’t go after every fan who’s customized an old jersey to their liking.

“Customization is so huge for those consumers, and Nike and other shoe companies like it are doing their best to cater to that desire to customize, while at the same time trying to ensure that they maintain the strength and enforceability of their trademark,” said Davis, the Holland & Hart attorney.

Scafidi predicted the lawsuit, if decided in Nike’s favor, will cause a shift in the customization market and chill other aspiring sneaker artists on platforms like Etsy.

“We’ll see that dialed back a bit because it will be more dangerous to try to make a profit doing that work,” she said.

To contact the reporters on this story: Annelise Gilbert at agilbert1@bloombergindustry.com; Aruni Soni in Washington at asoni@ic.bloombergindustry.com

To contact the editors responsible for this story: James Arkin at jarkin@bloombergindustry.com; Kartikay Mehrotra at kmehrotra@bloombergindustry.com

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