Online Sellers Sued by Nike for Trademark Infringement

Nike, the global footwear and athletic brand that virtually everyone knows, is suing online sellers for trademark infringement! The allegations made against e-commerce sellers claim that a network of counterfeiters has infringed on Nike’s intellectual property. If you’re one of the sellers identified in the lawsuit, your online business will be affected! 

Let’s examine a selection of Nike’s trademark infringement allegations:

Nike has identified many fully interactive, e-commerce stores offering Counterfeit Nike Products on online marketplace platforms such as Amazon, eBay, AliExpress, Alibaba, Walmart, Wish.com, Etsy, Temu, and DHgate, including the e-commerce stores operating under the Seller Aliases.

Defendants facilitate sales by designing e- commerce stores operating under the Seller Aliases so that they appear to unknowing consumers to be authorized online retailers, outlet stores, or wholesalers. E-commerce stores operating under Seller Aliases appear sophisticated and accept payment in U.S. dollars and/or funds from U.S. bank accounts via credit cards, Alipay, Amazon Pay, and/or PayPal.

E-commerce store operators like Defendants regularly register or acquire new seller aliases for the purpose of offering for sale and selling Counterfeit Nike Products. Such seller alias registration patterns are one of many common tactics used by e-commerce store operators like Defendants to conceal their identities and the full scope and interworking of their counterfeiting operations, and to avoid being shut down.

Counterfeiters such as Defendants typically operate under multiple seller aliases and payment accounts so that they can continue operation in spite of Nike’s enforcement. E- commerce store operators like Defendants maintain off-shore bank accounts and regularly move funds from their financial accounts to off-shore accounts outside the jurisdiction of this Court in an attempt to avoid payment of any monetary judgment awarded by the Court. 

Why Are Sellers Being Sued by Nike?

What does all of that mean?! Let’s break it down. Nike is filing the lawsuit because they believe the alleged network of counterfeiters is damaging their brand. In the process of doing so, the supposed infringement has cost Nike a significant amount of money. And, they are suing a group of online sellers in this single action. That’s so they can stop the sellers from offering any more counterfeit goods on the marketplace. As a “Schedule A” lawsuit, the Plaintiff has the power to attempt to reach settlements with the sellers directly. Ultimately, the decision to settle with Nike is up to each Defendant. But if you’re looking at that option, you may want to carefully weigh the pros and cons of that decision! 

One thing the sellers really don’t have much choice about is providing a response to the court. That’s a top priority! You’ll want to respond to the court. Avoid getting caught up in a Default Judgment, which will be even more expensive and complicated. This is a federal lawsuit that will impact your business, so you need to respond! The Nike infringement lawsuit might be extremely frustrating. In any event, you have to address the reality of it to move forward. 

Respond! Avoid a Default Judgment

Are you worried that you’re not informed on how to precisely respond to the court? Or, are you just totally confused about why you’re even being sued for infringement? Perhaps you don’t know which step to take first and/or what type of negotiation you should attempt with Nike… Any seller affected by this Nike counterfeit lawsuit should hire an intellectual property attorney! Your lawyer can guide you through what you’ll need to do so that you can maintain your business. Trademark infringement and the United States legal system can be a difficult thing to navigate on your own. From response to negotiation to resolution – your lawyer will be an invaluable asset!

Why can’t one of the Defendants just settle with Nike on their own and go from there? You absolutely can, but the majority of direct settlements in Schedule A cases result in sellers getting to keep less of their money than they deserve. This is where having an intellectual property attorney especially comes in handy! 

How Nike’s Restraining Order Will Affect Sellers

Once approved by the court, Nike will impose a temporary restraining order on the Defendant’s seller accounts. That will freeze the money in the seller accounts. You won’t be able to gain access to the money you yourself earned! When you settle with Nike, if you choose to do that, they’ll likely leave you with just about 60% of that frozen money. E-commerce operators often rely on every bit of their capital to operate. Having a restraining order interrupt your daily operation can put a great amount of stress on you and your business. By hiring an intellectual property attorney, you can both address the allegations and reach a resolution in the most effective way. 

Even though the claims made by Nike are allegations, the real-world impact of the claims will possibly disrupt your business and cost you money. Every seller’s method for finding a resolution may differ, but most will benefit from utilizing the services of an attorney. If you want to diminish the amount of damage the Nike infringement lawsuit will have on your online business, retain a lawyer today.

Are you being affected by the Nike trademark infringement lawsuit? Contact our team at Stockman & Poropat, PLLC for a free consultation! 

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Up next we will be discussing the Hallmark Trademark and Copyright Infringement Lawsuit.