Kelly Malloy

Kelly Malloy

 

Ms. Malloy earned her bachelor’s degree in Industrial and Systems Engineering at the University of Florida, and is currently a J.D. Candidate at the University of Miami School of Law concentrating on intellectual property.  At Miami Law, Ms. Malloy is on the University of Miami Law Review and serves as President of the Intellectual Property Law Society, President of the Inter-Club Council, and Executive Board Secretary of the Student Bar Association. During her first year at Miami Law, Ms. Malloy also served as a 1L Senator and was selected to join the Society of Bar and Gavel. As a result of her dedication to her coursework, Ms. Malloy is in the top 10% of her class, received the Dean’s Merit Scholarship, and was awarded the Dean’s Certificate of Achievement in her Patent Law course. Ms. Malloy is a law clerk at the firm and assists attorneys by drafting patent applications, performing legal research, and preparing for litigation.

 

Just two weeks after Nike filed suit against MSCHF over its Satan Shoes, the parties settled in the shadow of a preliminary injunction forbidding MSCHF from fulfilling any orders of the allegedly infringing sneakers. The Eastern District of New York found that Nike showed a substantial likelihood of success on “at least some” of its claims, specifically that “MSCHF’s actions are likely to confuse, and likely are confusing, consumers about the origin, sponsorship, or approval of MSCHF’s goods” and are “likely to dilute and tarnish Nike’s marks.” The injunction also bars MSCHF from using Nike’s marks, including the “SWOOSH”, in advertising and on any confusingly similar products. Additionally, in an effort to remove the Satan Shoes from circulation, Nike has reportedly asked MSCHF to initiate a voluntary recall to buy the sneakers from consumers at the original $1,018 price point.

This week, Nike filed suit against MSCHF, a Brooklyn-based streetwear company, in the Eastern District of New York for trademark infringement, false designation of origin, trademark dilution, and unfair competition. In collaboration with popular rapper Lil Nas X, who is widely known for his chart-topping hit “Old Town Road,” MSCHF launched their “Satan Shoes” on March 29, 2021. The Satan Shoes, which are unauthorized by Nike, consist of a genuine pair of Nike Air Max 97 sneakers modified by MSCHF with a host of hell-themed features. The additions include red liquid in the air bladder of each sole, a bronze charm with a pentagram attached to each shoelace, red embroidery of the number “6/666” on the body, an inverted cross depicted on each tongue, the words “MSCHF” and “LIL NAS X” embroidered on the back of either shoe, an outward-facing illustration of a pentagram on both insoles, and red embroidery of “LUKE 10:18” as a reference to a Bible verse about Satan falling from heaven. Further, MSCHF claims that the Satan Shoes have one drop of real human blood in each sole. Only 666 pairs were made available at $1,018 per pair, and the line is now completely sold out. The Satan Shoes launch also occurred in the wake of Lil Nas X’s newest single, “Montero (Call Me By Your Name),” which received backlash itself due to the music video’s imagery of hell and depiction of the rapper as the devil.

Despite MSCHF’s dramatic modifications to the Air Max 97s, Nike’s swoosh logo remains prominently displayed on the Satan Shoes. The stunt product is not the first of its kind for MSCHF, which also offered a line of limited-edition “Jesus Shoes'' in 2019. Those shoes consisted of a white pair of Nike Air Max 97 sneakers modified by MSCHF with custom stitching and water allegedly from the River of Jordan. Interestingly, however, Nike did not object to the Jesus Shoes.

 

 

This case is Nike, Inc. v. MSCHF Product Studio, Inc., Case No. 21-cv-1679, in the United States District Court for the Eastern District of New York. The image above is provided by Nike in the official complaint.

 

On March 2, 2021, a Texas jury ordered Intel to pay VLSI Technology LLC $2.18 billion in damages for patent infringement, one of the largest patent awards in U.S. history. The two patents at-issue are directed towards methods for increasing the power and speed of computer chips, and have a history of switching corporate hands. Before reaching VLSI, the patents-in-suit were owned by NXP Semiconductors Inc., a company that branched off from Philips, and Freescale Semiconductor, another company that spun off from Motorola. NXP acquired the patents when it bought Freescale, and they were transferred to VLSI in 2019.

Intel maintained at trial that it did not infringe the subject matter of the patents, but rather had invented its own techniques to improve chip performance. However, the jury decided otherwise and returned a verdict in favor of VLSI. Intel strongly opposes the outcome, plans to appeal, and maintains that VLSI has no products or sources of revenue aside from patent litigation. Still, Intel can breathe a small sigh of relief in the shadow of the massive judgment–had the jury found willful infringement, the judge could have increased the damage award up to three times.

Intel has dominated the billion-dollar chip industry for several decades. The damage award is reportedly equal to approximately half of Intel’s fourth-quarter profit and, while still up 23% on the year, Intel stock has fallen 2.6% since the verdict. On the other hand, of course, VLSI stated it is “extremely happy” with the result.

This case is VLSI Technology LLC v. Intel Corporation (Case No. 6:21-cv-0057-ADA) in the United States District Court for the Western District of Texas, Waco Division.

As published by the University of Miami Law Review (read full article here:  https://lawreview.law.miami.edu/trademark-modernization-act-2020/), the Trademark Modernization Act (“TMA”) introduces several changes to trademark law and administrative procedures.  Among them:

● Establishes expungement and ex-parte proceedings relating to the validity of marks in order to remove “dead wood” from the register
● Reinstates a rebuttable presumption of irreparable harm in infringement litigation, which has hindered the availability of injunctive relief in trademark enforcement cases
● Allows for third-party submission of evidence as part of letters of protest against pending trademark applications before the need to commence administrative litigation
● Authorizes the U.S. Patent and Trademark Office (“USPTO”) to shorten administrative response deadlines
● Affirms the political independence of administrative law judges of the Trademark Trial and Appeal Board (“TTAB”).

Kelly M. Malloy is a patent engineer and law clerk with Malloy & Malloy, P.L.  She is a J.D. candidate for 2022 at the University of Miami School of Law where she serves as President of the Intellectual Property Law Society, President of the Inter-Club Council, Junior Staff Editor on the University of Miami Law Review, and Executive Board Secretary of the Student Bar Association.

Nearly twenty years of trademark litigation between Marcel Fashions Group and Lucky Brand Dungarees resulted in a Supreme Court decision, which ruled that the principle of claim preclusion does not bar Lucky Brand’s reliance on a new defense, particularly given the evolving facts and issues that can arise in a trademark dispute. In the case under review, Marcel alleged that Lucky Brand infringed on Marcel’s “Get Lucky” mark through its use of “Lucky” in violation of a 2005 injunction (which followed the settlement of a 2003 action between the parties, with certain claims being released). The Supreme Court ruled that Lucky Brand was not precluded from asserting a defense based on the release in the 2003 agreement even though it had not pursued that defense in a prior action, because the defense can only be barred if the causes of action are the same, or “share a common nucleus of operative facts.” Finding that the prior action did not share a common nucleus of operative fact, the Supreme Court reversed the decision below and ruled that Lucky Brand could rely on the defense in the most recent action.

This case marks the third round of litigation between the parties. Marcel initiated the first round in 2001 with an allegation that Lucky Brand infringed on its “Get Lucky” trademark. A settlement was reached in 2003, which stipulated that Lucky Brand would refrain from using “Get Lucky”. In 2005, Lucky Brand initiated the second round, alleging that Marcel copied its designs and logos. Marcel filed multiple counterclaims, almost all relying on Lucky Brand’s continued use of the “Get Lucky” mark in violation of the 2003 agreement. Lucky Brand moved to dismiss Marcel’s counterclaims on the theory that they were barred by a release provision in the 2003 agreement; this was the only time Lucky Brand invoked the release defense prior to the current case. The 2005 action concluded with the district court permanently enjoining Lucky Brand’s use of “Get Lucky.” However, as pointed out by Justice Sotomayor in the Supreme Court’s decision, the injunction did not mention Lucky Brand’s use of other marks or phrases containing the word “Lucky.”

Marcel filed the most recent case in 2011, alleging that Lucky Brand violated the 2005 injunction due to its use of the “Lucky” trademark. The central issue became whether Lucky Brand’s failure to litigate the release defense in the 2005 suit barred it from invoking the release defense in the most recent action. The Second Circuit held that Lucky Brand was unable to assert the defense due to the principle of claim preclusion, which prevents parties from raising issues that could have been raised and decided in a prior action–even if they were not actually litigated. However, the Supreme Court reversed on May 14, 2020, finding that a defense can be barred only if the causes of action are the same, or “share a common nucleus of operative facts.”

The Supreme Court ruled that the 2005 and 2011 cases do not share a common nucleus of operative fact because, while the 2005 action depended on Lucky Brand’s use of “Get Lucky,” the case under review did not. Rather, the 2011 action alleged only that Lucky Brand infringed by using their own marks containing the word “Lucky.” The Court explained that claim preclusion generally does not bar claims predicated on events that postdate the filing of the initial complaint, and highlighted that this principle “takes on particular force in the trademark context, where the enforceability of a mark and likelihood of confusion between marks often turns on extrinsic facts that change over time.” Because the two suits involved different marks, legal theories, conduct, and time frames, the Court found that they do not share a common nucleus of operative fact. As such, the Court held that, under the facts of this case, claim preclusion would not bar Lucky Brand from relying on the release defense in the most recent action.