We’ve spent some time discussing the trademark first sale doctrine, and when a manufacturer of trademarked products has the right to stop the resale of a branded product. Nike shoes has sued to stop some resellers from altering and reselling their Nike shoes. Why has it allowed others to continue selling Nike-brand shoes when the shoes are altered?

There are a number of factors at play here: 

1) Is the reseller implying some false association between the original trademark owner and the reseller?

2) Is the reseller by its alteration of the quality of the product putting the original quality of the product at risk?

3) Is the reseller creating an association of the original trademark owner with some unsavory promoter or practice?

If any of the above are true, then the reseller runs the risk that the trademark owner will sue to stop the reseller from altering and reselling their product , to avoid putting their brand and the reputation associated therewith at risk of loss. 

Remember the purpose of trademarks: Trademarks exist to help the consumer select the product with certain qualities that she needs. For example, I never buy the shoes with the Swoosh. Why? Because the heel is always too wide for my foot, and then the heel slips, and I get blisters. I prefer the “3 Stripe” shoes, because those fit me better. Other consumers might prefer a certain model of shoe because they find that it offers certain cushioning or other performance features, and that is their whole purpose for buying that particular shoe. 

 But what if a reseller is altering the quality of the shoe by changing the performance via the modifications that they are making? Could that change the performance of the shoe, and thus the consumer experience of the shoe? Yes, of course. This is why the trademark first sale doctrine applies where a reselling party is selling goods that are not “materially altered.” What alterations are “material?” That depends on the product. As to shoes, an alteration might be “material” where the comfort or other performance-related features are altered. 

For example, in the NIke “Satan Shoes” instance, the reseller made certain changes that might be considered “material,” such as 1) injecting red dye and a drop of human blood into the midsole, 2) altering the sock liner of the shoe to include a pentagram, and 3) altering the appearance of the shoe to include a Satanic pentagram pendant. 

Injecting red dye — or any substance — into the midsole could affect the performance of the cushioning midsole, and cause the shoe to perform differently. It might be less effective at absorbing shock, which might lead a consumer to believe that Nike AirMax shoes are now of a lesser quality than before. The consumer now might seek a better-performing option, and cost Nike sales of even un-altered shoes. 

Changing the sock liner — even aside from the pentagram — might alter the durability or sweat absorbing qualities of the sock liner, which could affect the shoe performance. The addition of the pentagram might associate the valuable Nike brand with Satanism, which most people in our culture view as unsavory. 

The addition of the pentagram pendant on the laces of the shoe is another connection to Satanism, with which Nike does not want to be associated because of the negative connotations associated therewith. As a trademark owner, Nike has the right to decide what values it wants its brand to be associated with, and if it decides that Satanism is not one of them, then that is their prerogative as the trademark owner. 

Resellers are free under the First Sale Doctrine to resell authentic, unaltered goods that they obtained through normal sales channels. It does not, however, give a reseller “carte blanche” to do as it likes to the goods and then resell them, even if those goods were purchased through normal channels and at full price. This is especially true if the alteration causes damage to the manufacturer, and casts a bad light on the valuable trademarks owned by the manufacturer. 

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Contact Dallas, Texas trademark attorney Angela Langlotz today to get started on a trademark application for your valuable brand.