Nike, Inc. v. Stockx LLC

Background

Nike sued StockX, asserting claims involving trademark infringement, false designation of origin, unfair competition, trademark dilution, injury to business reputation, counterfeiting, and false advertising. During discovery, Nike sought documents and communications concerning allegedly counterfeit Nike products sold to Roy Kim, including StockX’s investigation of shoes returned by Kim.

Magistrate Judge Netburn denied, without leave to refile, Nike’s motion to compel documents relating to the internal investigation. Nike objected under Federal Rule of Civil Procedure 72(a). The district court could change the magistrate judge’s non-dispositive discovery ruling only if it was clearly erroneous or contrary to law, a highly deferential standard.

The Dispute

Nike limited its objection to materials containing the conclusions reached by StockX’s authenticators after reviewing Kim’s returned shoes. Nike argued that the work-product doctrine did not protect those conclusions and, alternatively, that StockX had waived any protection. The work-product doctrine generally protects documents or tangible materials prepared in anticipation of litigation by or for a party or its representative.

StockX argued that its conclusions about whether the returned shoes were counterfeit were protected. The court held that StockX had not adequately established that the doctrine applied. StockX did not include the authentication materials in its privilege log or identify the documents with enough detail in its briefing. The court also found that determining whether the shoes were authentic was a routine business matter that StockX would have undertaken whether or not litigation was anticipated.

The court further held that, even if work-product protection applied, StockX waived it. StockX employee Russell Amidon testified during a deposition that the authentication process concluded that some shoes might be inauthentic. The court ruled that StockX could not claim protection for those same conclusions after they had been disclosed in testimony.

Ruling

The court ordered that Nike’s objection was sustained as to the conclusions reached by StockX when it investigated the authenticity of the shoes sold to Kim. It found that the law clearly required StockX to produce the results of its authentication process for those returned shoes.

The ruling was limited to the authentication conclusions. The court did not decide Nike’s alternative arguments that other testimony or disclosures waived work-product protection. It also did not resolve the underlying trademark, counterfeiting, or other claims. Judge Valerie Caproni separately criticized the unprofessional tone of the parties’ briefing and letters and directed counsel to work more professionally and cooperatively in the future.