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27 July 2022PatentsMuireann Bolger

Q&A: Tim Getzoff on Puma and Skechers’ TM disputes

In recent months, two major shoe retailers,  Skechers and  Puma, separately filed lawsuits against  Brooks Sports over alleged IP violations.

In June, Skechers sued Brooks Running for infringing through its use of a “5” logo, which the sports retailer believes is too similar to its own signature “S” logo.

Meanwhile, earlier this month, Puma  launched a suit against Brooks over allegedly violating its “Nitro” shoe trademark rights as well as a design patent involving its foam moulding Nitro shoe technology.

WIPR caught up with  Tim Getzoff, partner at  Holland & Hart and member of the firm’s  outdoor recreation practice group, to explore the lawsuits as well as litigation trends in the sporting goods and equipment space.

What are your views on the lawsuits filed by Puma and Skechers against Brooks?

It was a spell of bad luck for Brooks to get sued separately by two large competitors in two different courts across the country in the space of a fortnight.

While many of these types of cases are settled before they reach court, I don't envision Brooks agreeing to stop using the mark ‘Nitro’ to inform potential customers that their shoes are nitrogen infused or using their own ‘five’ mark even though it may be argued that it looks like an ‘S’.

But the culmination of these cases will probably come down to the application of these marks. If an agreement is reached, it would centre on the specifics of how ‘Nitro’ or the number ‘five’ can be used.

What are the most interesting aspects of these cases?

The use of the mark at the centre of Puma’s lawsuit is interesting from a trademark perspective, because it touches on the  issue of “fair use”.

Assuming Brooks is injecting their shoes with nitrogen, they have a “fair use” right to tell the public that their shoes are nitrogen-infused.

There’s a big question mark over whether Puma can stop Brooks from using this word in the context of accurately describing a characteristic of their shoes.

Puma’s trade dress and design patent claims are a little more straightforward: if you look at the claimed design patent, the ordinary observer can decide whether they are substantially similar or not.

‘Fair use’ seems to be quite a topical and legal concept at the moment. Have you any thoughts on why that may be?

Companies always like to get trademark rights on suggestive marks or marks that, if not descriptive, are highly suggestive of a characteristic because it helps with their advertising. It provides an easier way to communicate to their consumers what their shoes are about.

The problem is when they do that, they'll often adopt a term that does have an ordinary descriptive meaning. According to US trademark law, you cannot prevent a competitor from using your trademark in an ordinary descriptive sense so long as it is doing so in a way that  does not otherwise cause confusion.

The dispute over ‘Nitro’ is a fairly typical “fair use” issue where on its own ‘Nitro’ (as it relates to shoes) is not descriptive in a superficial sense, and would appear to be a strong trademark.

But then lo and behold, Brooks comes along and apparently has technology where they inject the shoes with nitrogen. And they certainly have the right to advertise that fact to the public.

But that obviously jars with Puma’s trademark rights. And if the lawsuit reaches court, the determination of whether this use of its fair use or not really will depend on the specific manner that Brooks used the mark ‘Nitro’. So, for example, if the brand seems to be using the mark in a textual sentence, that's often considered on the right side of the ‘fair use’ defence.

But if they use ‘Nitro’ or ‘nitro-infused’ as a heading or title or in a prominent fashion branding context, that starts to look like trademark use and a scenario in which Puma would have a stronger claim.

Are we likely to see similar cases?

I would say yes. Because the law is malleable enough to accommodate them. The ‘Nitro’ dispute falls right in the middle of a grey area where there's certainly a good fair use defence.

Yet some of Brooks' use of ‘Nitro’ in Puma’s view crossed the line into trademark use, and is likely to cause confusion.

In outdoor branding, and particularly in footwear, branding and trademark issues are vital. Branding is viewed as the lifeblood of companies such as Skechers and Puma as well other competitors in the space such as Nike. And so protecting the scope of their brands is critical.

These cases will continue to come up as the trademark owners are seeking to protect their rights, and third-party competitors are seeking to use some of the same terms to accurately describe their products.

What other trends are in the sporting retail sector?

One key trend is the new-found ability to get a preliminary injunction or temporary restraining order if the use is recent enough, under the  2021 Trademark Modernization Act.

Before last year, getting a temporary injunction or a restraining order in a trademark case used to be difficult, and one of the main obstacles was proving irreparable harm.

The courts over the past decade years held that irreparable harm is not presumed and the plaintiff, ie, the trademark owner, must separately prove irreparable harm.

But the courts failed to provide a lot of good guidance on what that would mean or what that type of proof would look like.

But when The TMA passed, it reinstalled a presumption of irreparable harm and trademark cases, so the filing for preliminary injunctions or temporary restraining orders is now becoming more of a strategic option.

This means that over the past year and a half, trademark practitioners have to educate themselves and clients on the benefits of that option. On the other hand, it’s still a rare choice in the US as it's very cost intensive.

In the US, most of the time, each side pays its own attorney's fees. Even if you win or lose, there's not a “loser pays” rule, unless it is an exceptional case.

What impact are the metaverse and the emergence of non-fungible tokens (NFTs) having?

In the sportswear and outdoors sectors, we are seeing people creating NFTs that incorporate or reflect somebody else's IP.

This means that they will create an NFT that uses a third party trademark, or the trade dress, or something that makes it recognisable as a good or service belonging to a third party.

That's somewhat the point: they want a unique token that reflects something valuable and they're scouring pop culture for inspiration.

And that's problematic for trademark owners, obviously. While we've been fairly successful in stopping that so far, it's still something of the ‘Wild West’, in terms of rules and regulations and case law that would address this issue.

But as the NFT market gets more settled, the rules around using third-party IP will hopefully become more established, and we'll see far fewer issues in the future.

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