By Aron Solomon
I am a sneakerhead. I honestly don’t own a pair of shoes (aside from snow boots) that aren’t a sneaker of one type or another. I’ve been quasi-obsessed with sneakers for half a decade. I’m not alone, with close to $100B of sneakers sold globally each year.
Sneakers have also been in the legal spotlight a lot over the past few weeks and that doesn’t look like it’s about to end soon. While we have seen decades of sneaker wars between the world’s major brands, now the battle lines are expanding and engaging new combatants.
For years, Nike has justifiably focused on trying to end illegal copying of their shoes, both here in the United States and internationally. I have lived in a lot of places around the world and have seen massive markets of fake Nikes in places such as Hong Kong’s “Sneaker Street” and Beijing’s “Silk Market,” where there are three of seven floors of a massive indoor mall selling counterfeit sneakers. Some of these sneakers are absolutely horrible fakes, others are indistinguishable from the real thing even with a trained eye.
Now Nike’s focus is shifting to those people and businesses that perform customization of their shoes. For those unfamiliar with customization, it’s when some person (one person who is a solo customizer) or a business (some of these customizers are starting to scale their businesses and involve a lot more people) buys a shoe and then uses their creativity to change it. Imagine someone taking a white basketball shoe (the insanely popular Air Force 1, for example) and then not only adding designs, but potentially changing materials as well.
While customization has never moved me as a sneaker lover, it has moved a lot of other people, which is why Nike has the customization industry in its crosshairs. Just two weeks ago, Nike filed a lawsuit against one of those customizers. In Nike v. Customs by Ilene, Inc., a federal court – the United States District Court for the Central District of California – will look at what this legal analyst honestly sees as a remarkably overbroad claim.
Customs by Ilene, more commonly known among sneakerheads as Drip Creations, is getting the legal version of the kitchen sink thrown at them by Nike. Copyright infringement, trademark violation, unfair trade practices, unfair competition, and even counterfeiting form Nike’s legal claim in this case.
What the federal court is going to need to decide is whether all of the things this and every customizer does is either a permissible use of what can be done to a Nike shoe post-purchase, or whether the above claims have merit. If they do, it’s going to profoundly impact the customization industry, turning it from something with the potential to reach scale back to an underground cottage industry.
Michael Epstein, a New Jersey lawyer, argues that Nike’s strategy might raise some eyebrows:
“While it makes sense for Nike to include anything and everything their lawyers feel has a chance to succeed in their claim, courts sometimes don’t take kindly to a very large corporation piling on claims against a comparatively very small defendant.”
From a legal perspective, it can be far more complex where the sneaker customizer is a former Nike employee, as is the fact set in another case filed in July. Here, there are more than likely either restrictive covenants in place that would make it less than kosher for a former Nike employee to essentially deconstruct and reconstruct the shoes of his former employer.
But you and I haven’t worked for Nike, so why is customization illegal for us if we want to develop a hobby of buying some Nikes, imprinting our own artistic work on them, and perhaps selling them to our friends?
It’s going to come down to a legal analysis of what our rights are to both modify and then resell their sneakers. And don’t think for a second that the decisions in these cases will be limited to customizers. The sneaker resale market is truly massive. The most coveted models released by Nike and their competitors are immediately resold on sites such as eBay, GOAT, and StockX, among many others. Just StockX itself is worth $4B, and all it is, at its core, is a website that just facilitates you selling your sneakers to me.
From the legal liability perspective, what about athletes who order these customizations? There are bespoke sneaker artists who work exclusively with professional athletes, turning $300 shoes into $10,000 original works of sneaker art. Are these athletes – many of whom are under endorsement contracts with Nike – violating their legal arrangements by wearing (even in NBA games) customized shoes?
Whether these sneakers are works of art and whether they are original or theft is the current challenge of the courts. I am in the tiny minority of legal experts who agree that while it is illegal for entities around the world to make counterfeit Nike shoes, it’s actually good for their business.
Counterfeits are, ironically, a gateway for many people to eventually own the real thing. Brands favored by “hypebeasts” such as your author, understand that both imitation and being imitated are the greatest forms of creative flattery. Supreme, a brand built on imitation, successfully went after a massive Italian imitator, in what is a remarkably interesting story.
In the final analysis, it just seems like too much of a stretch to see sneaker customization as an intellectual property violation. The foundation of the customized sneaker is always the base sneaker itself. And the people who do the customizing love the shoes and the brand even more deeply than we sneakerheads do. While emotional attachment to a brand isn’t much of a defense to stealing from them, for a brand whose world-changing tagline is “Just Do It,” “Just Stop It” rings kind of hollow.