Nike, Inc. v. Reloaded Merch LLC

Background

Nike sued Reloaded Merch LLC and Bill Omar Carrasquillo over sneaker designs that Nike alleged copied the designs of Nike’s Air Jordan 1 and Dunk sneakers. Nike asserted trademark infringement, false designation of origin, unfair competition, and trademark dilution under federal and state law. Nike alleged that the defendants produced, marketed, and sold products resembling Nike’s registered trade dress designs and that consumers showed confusion about the similarities.

“Trade dress” refers here to the overall appearance of a product, including its design and the arrangement of its visual elements. Nike attached certificates of registration from the United States Patent and Trademark Office for trade dress associated with its Air Jordan 1 and Dunk sneakers, including outsole designs. The certificates contained written descriptions and illustrations distinguishing claimed design elements from elements shown only to indicate the position of the mark.

Motion to Dismiss Standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Nike’s complaint did not state a legally sufficient claim. At this stage, the court accepts well-pleaded factual allegations as true and asks whether they plausibly support a claim for relief. The court does not decide whether Nike will ultimately prove its allegations.

For trade dress infringement, a plaintiff generally must show that the trade dress is valid and protectable and that the defendant’s use is likely to confuse consumers. For unregistered trade dress, courts may require a plaintiff to describe the trade dress’s character and scope, show that it is not functional, and show that it is distinctive. A federal registration provides initial evidence that the mark is valid and creates a rebuttable presumption of validity.

Court’s Analysis

The court held that Nike adequately pleaded trade dress infringement. Nike’s registrations satisfied the first part of the infringement analysis because the certificates provided initial evidence that the registered trade dress was valid and protectable. The court ruled that Nike did not have to separately plead the precise character and scope of the registered trade dress or its distinctiveness.

The court reasoned that the United States Patent and Trademark Office’s registration process already requires an applicant to identify the trade dress’s elements, establish distinctiveness, and show that the design is not functional. The registration certificates also described and illustrated the claimed design elements. According to the court, requiring Nike to plead those matters again would deny registered trade dress the benefits provided by federal trademark law.

The court separately found that Nike alleged enough facts to support a possible likelihood of consumer confusion. Those allegations included similarity between the defendants’ sneakers and Nike’s registered trade dress, sales to the same customers, and social-media posts reflecting confusion. The court acknowledged that some decisions had reached a different conclusion about pleading registered trade dress but declined to follow them because it found them inconsistent with controlling Second Circuit authority and the reasoning behind the registration process.

Disposition

Judge Victor Marrero denied the motion to dismiss filed by Reloaded Merch LLC and Bill Omar Carrasquillo. The court directed both defendants to file an answer to Nike’s complaint within 21 days and directed the Clerk of Court to close the pending motion. This order addressed whether Nike’s complaint was legally sufficient at the pleading stage; it did not determine whether Nike will ultimately prevail on its claims.