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Deal With the Devil: Nike and MSCHF Reach Settlement Over Lil Nas X ‘Satan Shoes’

After much media hype, Nike Inc. has settled a trademark dispute with the artist collective, MSCHF Product Studio, Inc., over claims that MSCHF deceived consumers into believing that Nike is affiliated with the collective’s “Satan Shoes.”
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Background

In March 2021, musical artist, Lil Nas X, and artist collective, MSCHF, unveiled a modified Nike Air Max 97 shoe bearing the trademarked Nike ‘swoop’ alongside a pentagram, biblical verse, and most notably, human blood injected into the clear panel in the sole of the shoe. The end product, dubbed the “Satan Shoe,” was the subject of much media attention and controversy as celebrities, cultural commentators, politicians, and the broader public alike, hotly debated the polarizing product.

The Lawsuit and Settlement

In April 2021, Nike filed suit against MSCHF over the Satan Shoes, alleging trademark infringement and dilution, and unfair competition. In support of its claims, Nike alleged that “since the announcement of the Satan Shoes, Nike…suffered significant harm to its goodwill, including among consumers who believe that Nike is endorsing Satanism.” Nike also pointed to online consumer commentary making calls to boycott Nike, or otherwise disparaging the brand, made under the supposedly mistaken belief that the Satan Shoes were authorized or approved by Nike. In defense, MSCHF relied on the First Amendment, stating that the Satan Shoes were “individually-numbered works of art” that “push the boundaries of today’s culture through story-telling and performance art,” and are therefore protected by the freedom of expression. MSCHF also relied, in part, on the fairly limited first-sale doctrine, which allows for the resale of branded goods.

Ultimately, Nike’s trademark and unfair competition claims were compelling enough to result in the grant of a temporary restraining order against MSCHF. The order prevented MSCHF from selling any remaining Satan Shoes – of which all but one of the 666 pairs had already been sold.

Shortly thereafter, Nike and MSCHF reached a settlement agreement. Under the agreement, MSCHF, having “already achieved its artistic purpose,” agreed to buy back any previously sold Satan Shoes for the original retail price, thereby removing them from circulation. MSCHF also agreed to buy back its earlier Nike Air Max 97-based “Jesus Shoes” which made similar modifications to the underlying shoe.

Takeaways

As creative marketing endeavors and celebrity collaborations continue to be the norm, companies should take care to ensure that such endeavors do not run afoul of applicable regulations, including federal and state intellectual property and unfair competition laws. As this case demonstrates, brands are often willing to take legal action to protect their valuable intellectual property. Further, defenses to such claims can be fairly limited and do not function as blanket permissions to ignore applicable laws and regulations. Companies should consider these limitations in their assessment of the legal risks associated with a particular endeavor.

Contacts

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