Nike, fresh from 'Satan shoes' win, eyes 'much weaker' trademark battle vs the Post Office

Reggie Wade

Nike (NKE), on the heels of settling its lawsuit with design brand MSCHF for possible trademark infringement, now has to defend itself against nearly identical allegations from another antagonist.

In an ironic twist, the sneaker giant is being taken to task by the United States Postal Service over an upcoming postal service-inspired sneaker reportedly being planned by Nike. The USPS’s challenge, the latest in a string of public relations headaches for the top athletic brand, all but guarantees the company will end up in court once again — but with the shoe on the other foot.

[Read more: Nike and MSCHF agree to settle lawsuit over 'Satan shoes']

According to a USPS statement provided to Yahoo Finance, Nike’s experimental Air Force 1 sneaker “is neither licensed nor otherwise authorized by the U.S. Postal Service This is an unfortunate situation where a large brand such as Nike, which aggressively protects its intellectual property, has chosen to leverage another brand for its gain.”

The statement added: “The Postal Service is disappointed in Nike’s lack of response to repeated attempts to come to a solution. The Postal Service will take whatever actions it deems necessary to protect its valuable IP rights.” Nike did not immediately respond to Yahoo Finance’s request for comment.

According to Christopher Buccafusco, a legal expert at the Cardozo Law School in New York City, Nike might find itself on far more shaky ground than when a judge ruled relatively swiftly in its favor.

“Nike’s claims to doing this without a license are much weaker than MSCHF,” he told Yahoo Finance. The latter “is engaged in a pretty obvious set of criticism and comments on Nike and Nike’s role in corporate culture. All of the sorts of things that we think fair use are there to protect,” he explained.

Yet Nike “is not doing any of that. [It’s just saying] that’s a cool logo that USPS uses, we want to use your cool logo. It’s not a commentary on USPS,” Buccafusco added.

“Nike is not engaged in a first sale. It’s not like Nike bought USPS logos and stuck them on their shoes. They created a logo that was like the USPS logo because it kind of looks cool to them,” he said.

While Buccafusco believes that Nike’s behavior is less commendable and less acceptable than that of MSCHF, he does not believe that Nike should lose in court.

However, Matthew G. Miller, founder of MG Miller Intellectual Property Law LLC, believes the postal service may have a valid legal claim against Nike.

“In addition to trademark infringement, famous marks are given to additional causes of action; dilution and tarnishment,” Miller told Yahoo Finance.

“So what the USPS position is likely saying is, ‘I don’t think anyone’s going to think that these Nike shoes are sponsored by the USPS — or maybe they will,’” he added.

“But just by virtue of you releasing these, it’s diluting the USPS brand, and that is a tort … I think the USPS has a valid claim,” Miller added. “I don’t think Nike is going to be able to do this without paying a fee to the USPS.”

As part of Nike's settlement with MSCHF, the Brooklyn-based brand will initiate a voluntary recall to buy back not only any Satan Shoes but also the 2019 MSCHF-made Jesus Shoes for their original retail prices, in order to remove them from circulation.

One headache after the other

SUZHOU, CHINA - MARCH 25: A Nike logo sits on the company's office building on March 25, 2021 in Suzhou, Jiangsu Province of China. (Photo by VCG/VCG via Getty Images)
SUZHOU, CHINA - MARCH 25: A Nike logo sits on the company's office building on March 25, 2021 in Suzhou, Jiangsu Province of China. (Photo by VCG/VCG via Getty Images) (VCG via Getty Images)

The looming legal skirmish with the Post Office is the latest in a string of PR-related fiascos that have befallen the world’s leading sports apparel brand.

In the last few months alone, Nike has grappled with a reselling scandal involving a former company VP; former Democratic presidential nominee Bernie Sanders calling out the brand for paying $0 in federal taxes for three years; and the company drawing the ire of Chinese state media for criticizing Beijing for human rights abuses against Uyghurs in the northern province of Xinjiang.

“[It’s] certainly a tough period from a PR point of view but none of the issues have had much play on social media,” NPD Group Senior Industry Advisor for Sports Matt Powell told Yahoo Finance, underscoring how the Swoosh brand has kept its momentum in the face of significant PR-related backlash.

“Nike keeps getting caught with its hand in the cookie jar, but do investors really care?” asked Rick Helfenbein, former chairman, president and CEO of the Apparel & Footwear Association (AAFA). On Thursday, the stock traded around $134, just shy of a 52-week high it reached in January.

“They keep trucking along. Nobody ever, nobody ever wins [against] them. They seem to win everything,” he added.

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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