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Lil Nas X, Nike Deal Ducks Tension Between Speech, Trademark (1)

April 30, 2021, 9:50 AM; Updated: May 4, 2021, 10:20 PM

The Satan Nikes sold by rapper Lil Nas X drew public ire and provoked a corporate giant, but also intrigued attorneys with the question they raised about the intersection of trademark and First Amendment rights.

Art collective MSCHF Product Studio settled with Nike Inc. a week after a court ordered it to stop selling Nike shoes altered with demon iconography during litigation. MSCHF produced the shoes in collaboration with Lil Nas X.

The parties had appeared set to engage over the point where a brand owner can shut down an artist crying free speech, among other interesting areas of trademark law.

But that threshold can be blurry, especially with creative items sold as consumer goods. Settlements like the one between Nike and MSCHF often short-circuit case law that might clarify where the line is.

The lack of precedents means parties to potential tests cases may hesitate to risk lengthy litigation. The resulting uncertainty leaves room for courts to set different standards.

“Cases often don’t go all the way to the mat on First Amendment issues. The First Amendment can be interpreted differently by judges, and come out in ways you don’t predict,” intellectual property attorney Carrie A. Johnson of Eastman & Smith Ltd. said. “Hopefully, in the future one of these cases will go the whole nine yards.”

Johnson defended the music group Outkast in a First Amendment case brought by executors for civil rights icon Rosa Parks. A lower court ruled for Outkast, but the Sixth Circuit ruled that whether the title “Rosa Parks” was artistically relevant to the song should be settled by a jury.

The parties instead settled in 2005 after six years of litigation.

“It’s a crapshoot for defendants,” Johnson said of such cases.

666 Pieces of Art

Nike sued March 29 over MSCHF’s bid to sell 666 black Air Max 97s, altered with red accents, a drop of human blood in the mid-soles, and symbols including an upside-down cross and pentagrams.

The complaint featured internet posts mistakenly excoriating Nike for endorsing satanism. It alleged trademark infringement and dilution by tarnishment, meaning the Swoosh’s reputation was harmed by association.

MSCHF deemed the shoes, which sold for $1,018 per pair, First Amendment-protected art. It claimed they commented on Christianity’s treatment of homosexuality. Lil Nas X, born Montero Lamar Hill, is openly gay.

MSCHF said the portrayed collaboration with Satan also commented on “extreme” sneaker “collab culture"—brands or creators partnering with a shoe company to make a special versions of existing sneakers.

Art or Shoe

Free expression adds an escape that can overcome a standard trademark infringement analysis. Several circuits, but not all, have adopted the Rogers test. It allows use of a trademark in an expressive work as long as it’s artistically relevant and not explicitly misleading.

The test has been applied to mass-produced consumer goods. The Second Circuit applied it to approve Activision’s use of Humvee trademarks in the video game series “Call of Duty.”

More recently, the Ninth Circuit applied Rogers to a Jack Daniels bottle-shaped dog chew toy dubbed “Bad Spaniels.” The ruling grated on some trademark attorneys, who argued Rogers’ reach should be limited to products that are expressive works, not just goods that merely incorporate a creative feature.

Commercialization should at least “change the tipping point” for when art can seem to infringe a brand owner’s rights, intellectual property attorney Cynthia Johnson Walden of Fish & Richardson PC said.

Parody generally receives substantial protection. MSCHF suggested that a collaboration with Satan qualified, but that isn’t a valid defense when the parody isn’t directly aimed at the brand or work in question, Johnson said.

“And if the judge doesn’t get the joke, you may not win,” Johnson added.

Trademark law’s case-specific nature and multifactor analyses give courts leeway, trademark attorney Lisa Buckley of Pashman Stein Walder Hayden PC said. Rather than bright-line legal boundaries, judges sometimes start with “you know it when you see it” conclusions and work backward to a “fair and appropriate” result, she said.

“While I think there are objective differences between Humvee, Jack Daniels and Satan Shoes, I think courts also sometimes just say ‘You’re hurting Nike,’” Buckley said. “Applicable doctrines are loose enough that you can apply them to go one way or another.”

Don’t Fight, Win Anyway

Trademark law offered other interesting paths to fight the suit, but they would have been uphill, attorneys said. That difficulty further sapped MSCHF’s hopes of prevailing, reducing incentive to push its First Amendment case.

People can generally resell copyright- or trademark-protected products under the first sale doctrine. But reselling “materially altered” goods may infringe as it can damage a brand’s reputation, Jeffrey A. Kobulnick of Brutzkus Gubner Rozansky Seror Weber LLP said.

A disclaimer for buyers would have offered MSCHF only limited benefit, intellectual property attorney Amy Tindell of Holland & Hart LLP said. “Post-sale confusion” means a mark can be tarnished in the eyes of people who saw, but didn’t buy, the shoes, Tindell said.

Rather than fight, MSCHF agreed to buy back any shoes from parties that felt duped and assume responsibility for the modified shoes’ quality.

Both sides arguably won without testing their legal theories, attorneys said. Nike publicly distanced itself from what it called “satanism” without what may have been seen as a prolonged corporate attack on art. MSCHF generated publicity and money for itself and Lil Nas X, who wore the shoes in a recent music video.

“Their attorney said ‘we already got what we want out of this.’ He said the quiet part out loud,” trademark attorney James H. Donoian of McCarter & English LLP said of MSCHF. “And nobody is going back to MSCHF to get their money back.”

(Updates an April 30 story with additional reporting. A previous version corrected a law firm name in the 20th paragraph.)

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com

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