Trademark Infringement. Nike, Inc, manufactures and markets footwear, apparel, and related accessories. To identify its products, Nike uses the word "Nike" and/or a "swoosh" de-sign as its trademarks. From 1977 through 1991, Nike spent more than $300

Question

million advertising the trademarks. Since 1971, sales revenues for items bearing the trademarks have exceeded $10 billion. Nike began using the phrase "Just Do It" in 1989 as a slogan for its sweatshirts, T-shirts, caps, and other accessories. Sales revenues for "Just Do It" items have exceeded $15 million. "Nike," the swoosh design, and "Just Do It" have gained widespread public acceptance and recognition. Michael Stanard is an award-winning commercial artist whose works include, among others, the trademark "Louisville Slugger" printed on baseball bats. As a summer pro-ject, he and his daughter decided to market his first name, Mike, as a takeoff on the Nike logo. They named their project "Just Did It" Enterprises and concentrated on marketing T-shirts and sweatshirts to members of the general public with the given (first) name of Michael. They also mailed brochures to college athletes and celebrities named Michael. Sales were entirely by mail order. Approximately two-thirds of those purchasing the shirts were named Mike. Stanard believed that the other third probably bought a T-shirt for a friend, relative, or loved one named Mike. Ultimately, the project lost money. Nike sued Stanard for trademark infringement. Sta-nard argued that the word play was humorous and constituted a fair use of the trademarks as a parody. Should the court rule that Nike's trademark had been infringed? Explain.

Answer 1

Trademark infringement
The court agreed with Nike that its trademarks are widely recognized and deserve protection but pointed out that to prevail, Nike needed to show a likelihood of confusion on the part of the public. The court concluded that Stanard's parody did not infringe Nike's trademarks as a matter of law. The court considered several factors in its analysis. The degree of similarity between the trademark and the parody in appearance and suggestion was the first factor. Similarity includes how words are pronounced, "the verbal translation of any graphic designs, and whether they suggest similar ideas or meanings." The court noted that the marks are similar, but "[t]he parties do dispute, however, whether NIKE and MIKE would be pronounced the same." Stanard's business was entirely mail order and to buy a "Mike" product, a customer had to make a check out to "Just Did It Enterprises." There was no evidence that Nike sold shirts through the mail, and any check would need to be payable to "Nike." Thus, "we cannot conclude that as a matter of law the parody and trademark are so similar as to confuse the consumer." The second factor the court considered was the degree of similarity between the products. "As a matter of law, Nike's trademark and Stanard's parody dealt with similar products, used for similar purposes." As for the "marketing channels used by the two merchants"—the third factor considered by the court—"a jury could find * * * that Stanard utilizes a completely different marketing channel than Nike." The court acknowledged that proof that a parody actually confuses consumers is substantial proof of a likelihood of confusion, but the court emphasized that Nike had not shown "why a customer could conclude that Stanard's shirt was a Nike product." From this, "a jury could conclude that Stanard's parody would not likely confuse a purchaser." The court also discussed Stanard's asserted intent to amuse rather than confuse. Although to be tricked by the "Mike" shirt at first glance was Stanard's "whole point," the court stated that a jury could conclude that "any initial confusion ends with a closer look, when the observer ‘gets it.'"