White sneakers serve the creative minds among us very well as a blank canvas. Our paralegal, Emilia, who personalizes sneakers under the name Uniqwear (https://www.instagram.com/__uniqwear__) and transforms them into unique accessories, thinks so too. With a paintbrush and some textile paint, she gave her own Nikes a gorgeous new look. But does this not bother brand owners? After all, this practice comes down to free-riding on the popularity of their brand. Moreover, trademarks are often given a very serious make-over.
It should come as no surprise that Nike would want to prevent the sale of such creations – which are not uniquely used for private purposes – as a form of free-riding on its popularity. But the question is: does Nike have the ability to do so? And how should creatives deal with these kinds of claims?
Opposing interests
Nike’s Swoosh is known all over the world. It is also registered as a trademark. Nike doesn’t like to see others cashing the popularity of this trademark. After all, the sports brand makes great efforts to create and maintain its name and fame: big amounts of time and money are spent on large-scale marketing campaigns.
Isn’t it logical that they oppose the development of the customs business on the back of their brand? Surely, the fact that personalized “white products” would attract less attention than personalized branded items, isn’t very hard to believe. Thus, it is understandable that trademark owners are exploring their options to control the unauthorized use of their well-known trademarks.
Nonetheless, the sale of pimped branded goods at high prices is a booming business. The interests of the artist-entrepreneurs are at odds with the abovementioned trademark owners’ interests. First of all, the creatives tend to invoke their rights as owners of the sneakers. These ownership rights would allow them to do whatever they want with them. Furthermore, entrepreneurs emphasize their artistic freedom. They also argue that trademark owners already did receive an appropriate reward for their efforts at the time of the sale. The list of arguments is not limited to what we mention here, but this gives you an idea of what is at stake.
So, there is no problem, legally speaking?
Sneakers for private use
An artist who decorates and transforms her (as of yet stark white) sneakers into an artistic gem to supplement her own shoe collection, has nothing to worry about. In any case, a trademark owner can only prevent the use of his trademark in the course of trade. Thus, in principle, protest against private use is excluded.
The commercial sale of custom sneakers
Once a trademark owner has sold one of his trademarked products in the EU for the first time, this product must circulate freely. This is called the exhaustion rule. From the moment of the first sale of a branded product onwards, the brand owner loses control over what happens to it. This means, for instance, that others have the right to resell Nike sneakers undisturbedly.
Nevertheless, trademark law foresees an important exception to the exhaustion rule. When the trademark owner has a “legitimate reason” to oppose the further commercialization of the goods, the rule does not apply. This ensures the ability of a trademark owner to fight the resale of modified products.
Examples of branded products and their additions whose resale was challenged in the past include Cartier watches with added brilliants, the tuned version of a Porsche Cayenne, jeans which were given a worn look, painted light bulbs and furniture in colors other than the original. According to these rules, Nike could take action against the sale of a pair of pimped Air Maxes. Platforms selling pre-made customs, be warned!
Customizing as a service
However, creative minds willing to embellish trademarked shoes in return for payment shouldn’t despair. The service, consisting of the decoration of customers’ personal sneakers, does not constitute a trademark infringement, since the artist doesn’t actually make use of the trademark in the course of trade.
Therefore, Nike cannot take action against someone who decorates sneakers for a fee. Nevertheless, it is certainly not superfluous to have a big stick in case problems do arise. Good conditions and agreements with the customer (as the principal) can therefore be essential.
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Artists must of course be able to market their customs services. How can and may they do this? Trademark owners cannot take action against the use of their trademark “if it is necessary to indicate the purpose of services provided by others.”
This abstract piece of theory ensures, for example, that garage owners are able to indicate that they repair a particular brand of car (e.g., BMW).
Applied to Uniqwear, this means that the artist can perfectly describe her customizing services by mentioning that she decorates Nike shoes, among other things. Nonetheless, the situation is not always so black and white. Due to the fact that every entrepreneur is bound by the fair customs in trade and industry, in certain cases, the use of a trademark (such as the Nike Swoosh) for advertising will not be permitted. Thus, a balancing exercise will have to be made in each specific case.
And what could go wrong? Could trademark owners oppose?
A trademark owner can oppose the use of his trademark. But what does this really mean?
Trademark owners can accuse creators of trademark infringement for a variety of reasons:
- They may claim that the personalized sneakers are causing confusion amongst the public. In the long run, people would no longer be able to distinguish the real Nikes from the customs.
- The public could also associate customs with Nike and possibly assume that there is some kind of collaboration. This in turn would dilute the brand.
- Furthermore, Nike could claim that customs damage the reputation of its brand because of the loss of control over the quality of the shoe-designs.
- Finally, Nike could claim trademark infringement based on the free-riding of others on the reputation of its trademark.
What are the consequences? Trademark owners can demand several things in response to a trademark infringement. For example, Nike could ask for a ban on the sale of a custom Air Force 1. In the worst-case scenario, Nike could also claim damages.
How likely is this to happen? You are probably inclined to think that big players like Nike don’t bother with such small businesses and that customs basically provide them of free advertising. However, Nike’s infringement claims filed in the United States contradict this. Thus far, Nike has taken action against the sale of Jesus sneakers (sprinkled with holy water and decorated with all kinds of Catholic symbols) and Satan sneakers (administered a drop of blood and pagan signs) and a customs platform called Drip Creations. So the risk is real.
Conclusion
Great news! The decoration of sneakers for personal use falls in principle beyond the control of the trademark owner.
But. Such alterations within a commercial context turn out to be a completely different matter. While the sale of customs is completely out of the question, customizing as a service does seem to be permissible. However, it is important to stipulate clear conditions and make agreements with customers. Also, be careful with advertising and fair trade practices. If you feel uncomfortable making this assessment alone, you can always seek advice via hallo@dejuristen.be.
Written by Karen De Bleecker Hernandez, summer Trainee deJuristen, and Kris Seyen, Partner deJuristen
