Nike Sues Over Sketchy Infringement of Design Patents

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Table of Contents

• Recent Action in the U.S.
• Is the Law Similar in Australia?
• What are Exclusive Rights? 
• What Would Nike Need to Prove if They Were Suing In Australia?
• Can Nike Prove Skechers Have Created Substantially Similar Products?

Nike is a universally recognised company and the brand’s infamy is one of its greatest assets. Naturally, Nike often finds themselves defending their name in court, challenging other players looking to cash in on their established reputation. These players vary from the smallest one person operation making knock off shoes somewhere in South East Asia, all the way up to a publicly listed, multinational corporation with over USD$2.3 billion in revenue like Skechers. Below, we explain Nike’s recent action against Skechers for alleged design patent infringement.

Recent Action in the U.S.

Nike has recently lodged an action against Skechers Oregon’s District Court for alleged design patent infringement of several different athletic shoe styles. Nike believes that these Skechers shoes are a knockoff of their own Flyknit design and are in breach of the exclusive rights afforded to them by their registration with the US Patent Office.

Is the Law Similar in Australia?

The laws surrounding Intellectual Property are similar in most World Trade Organisation member countries. This is due to the minimum requirements for the protection of Intellectual Property that countries in the WTO must introduce and enforce to become a member.

Although Australia does not have a Design Patent system, we do have similar protections under the Designs Act 2003 (Cth). This system allows an artist, or company, to register a design that is ‘new’ and ‘distinctive’ to protect another copying their creative work without their permission. This protection is known as ‘exclusive rights’.

What are Exclusive Rights? 

Section 10 of the Designs Act gives owners of a registered design the following exclusive rights:

1. To make, or offer to make, a product which embodies the registered design;
2. To keep, import, use, sell, hire or otherwise dispose of a product that embodies the design;
3. To use this product in any way for the purpose of business or trade; and 
4. To authorise another person to do any of these things.

Authorisation to sell the design, which is considered personal property, is where the monetary value and ability to protect a design originates.

What Would Nike Need to Prove if They Were Suing In Australia?

Chapter 6 of the Designs Act sets out what the design owner must prove to succeed on their claim. The test for what constitutes infringement, contained in section 71 of the Designs Act, primarily focuses on whether the alleged infringer has made a product that ‘embodies a design that is identical or substantially similar in overall impression to the registered design. This section also includes provisions for ensuring the registered owner can commence an action against someone who imports, sells, hires, uses or keeps an infringing product.

Can Nike Prove Skechers Have Created Substantially Similar Products?

As discussed, if Nike had registered their Flyknit design in Australia and commenced an action here, to succeed in their claim they would need to prove that Skechers had made shoes that are identical or substantially similar in overall impression.

Part of Nike’s filing in the U.S. included online discussion about the similarity between the Nike and Skechers shoes. While this anecdotal evidence is not necessarily conclusive, it does indicate that Nike may have a pretty solid case.