Nike vs. Skechers: What’s at Stake in Their Contentious Legal Battle

On Monday, Nike Inc. filed its latest lawsuit against Skechers USA Inc. accusing the California-based brand of infringing on its intellectual property.

By now, it’s a familiar position for the companies to be in: Nike has filed four IP suits against Skechers in the past five years alone, encompassing claims of trademark, trade dress, design patent and, most recently, utility patent infringement. While allegations of copying are routine in the fashion industry, Nike’s stance is notable, some experts suggest, because of both its aggressiveness and the types of claims it is pursuing.

“[Nike is] using not just traditional trademark and design patents, which are pretty normal in the fashion industry, but they are using utility patents,” said Zachary Silbersher, a founding partner at the patent law firm Kroub, Silbersher & Kolmykov PLLC. The latter are fairly uncommon to see in footwear-industry disputes: Unlike design patents, which protect the aesthetic features of a product, utility patents cover the functional elements of an invention and tend to be more technical.

By aggressively going after competitors in this area, he said, Nike seems to be promoting itself as a technology company just as much as a footwear company. “It’s saying, ‘The technology that is built into these sneakers matters. It’s not just the brand, it’s not just the Swoosh.’ “

This strategy fits with the company’s current direction, which has seen it invest over $1 billion in the past year to evolve its app and NikePlus membership platform, launch new tech-driven store concepts and enhance its data and analytics capabilities to stay ahead of the competition in every digital realm.

Nike has used the utility patent avenue before, suing Puma last May for allegedly infringing on seven of its patents related to its Flyknit, Air and cleat technology. At the time, Nike said it held more than 300 utility patents for its Flyknit technology and over 800 utility patents for its Air technology. The case continues, and, as with Skechers, Nike is seeking damages and a permanent injunction.

In its most recent suit, Nike calls out two pairs of Skechers sneakers — the Skech-Air Jumpin’ Dots and Mega shoes — that it claims incorporate Nike’s patented technology for features including “a fluid-filled bladder” and “a plurality of foam beads” filling the cavity of the shoes. The Oregon-based sportswear giant further alleges that Skechers’ infringement has been “willful, intentional and deliberate,” though this isn’t necessary to determine liability, according to Mark Patterson, a law professor at New York’s Fordham University.

Skechers could even use a patented element inadvertently “and still be liable for patent infringement,” Patterson said. “If they’re willful, though, the court can make them pay up to three times the damages that they would otherwise have to pay.”

That said, these aren’t easy cases to win, said Silberher. “Even if you’re Nike and you hire the best lawyers in the world, you can still lose these lawsuits based on really small technical differences that might not seem to matter in the big picture, but they matter when it comes to the patent.”

Here, though, the potential damages may be less important to Nike than getting its competitors’ sneakers off the market, which he called a “golden ring in patent infringement.” For one, Nike’s revenues eclipse those of its competitors: It made $39.1 billion in fiscal 2019, compared to Skechers’ projected revenues of $5.1 billion, according to its most recent quarterly results, and Puma’s projected revenues of 5.3 billion euro ($5.9 billion).

Nike also likely wants to send a message to rival brands and the industry at large that it can and will aggressively protect its intellectual property.

Indeed, as the brand said in a statement to FN: “Nike has a strong history of innovation and leadership in footwear design and development. We innovate to help athletes reach their potential, and we vigorously defend and enforce the intellectual property that protects those innovations.”

Skechers said it doesn’t comment on ongoing lawsuits, but pointed to its victory against Nike earlier this month in a trademark infringement suit dating back to 2014. That year, Nike-owned Converse sued Skechers along with 30 other brands, including Aldo Group, Fila USA Inc. and Wal-Mart Stores Inc., for using certain design elements that it alleged were too similar to those of its Chuck Taylor All Star shoes.

In its ruling, the International Trade Commission found that Skechers did not infringe on Converse’s midsole trademark, and the ITC found the trademark to be invalid in this case because Skechers had been using similar design features as far back as 2001, affirming several earlier rulings.

“These rulings validate Skechers investment in its distinctive designs and brand identity, an investment that has helped build Twinkle Toes into a number one shoe line for young girls, and build both Twinkle Toes and BOBS into household names synonymous with Skechers — not with Converse or any other brand,” Skechers president Michael Greenberg said in a statement.

In its September 30 lawsuit, meanwhile, Nike has alleged numerous cases of design patent infringement related to its best-selling VaporMax and AirMax 270 styles, which it says are a pattern at Skechers of copying, or “Skecherizing” competitors’ designs.

The court, though, will be looking at the precise patents Nike holds and how they compare to Skechers’ designs, said Patterson. “If Nike’s patent is valid, Nike is protected, whether Skechers copied its technology or didn’t. Patent law prevents anybody else from doing what you’ve got a patent for — unlike copyright law, which prevents people from copying.”

Skechers, for its part, fired back in mid-October with an ad placed in The New York Times and Los Angeles Times accusing Nike of being a “bully” and using “its vast resources to stifle competition in the courtroom rather than compete in the marketplace.”

This wasn’t the first time Skechers used this tactic against its rival: In March, the brand ran an ad mocking an embarrassing public moment for Nike. The previous week, then-Duke Blue Devils basketball star (and now New Orleans Pelicans player) Zion Williamson’s Nike PG 2.5 shoe split in half about 30 seconds into a game against the North Carolina Tar Heels. The ad riffed on Nike’s iconic slogan, replacing “Just Do It” with “Just Blew It,” and added the Skechers logo and the tagline: “We won’t split on you.”

It could still be years before the IP cases see any resolution, but in the meantime, at least, consumers may be able to look forward to the brands finding ways to lob shots at one another outside the courtroom.

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