The picture bears this legend and link: Take a hike: Counterfeits affect Russian economy, and the link takes you to the original photo and the article about counterfeiting in Russia.
Does the picture depict a counterfeit, however? It is certainly a trademark infringement. No, the extra little baby Swoosh within the NIKE swoop depicted above does not help the fake Swoosh from being likely to be confused with a real Swoosh. No, the change from NIKE to HIKE, especially alongside the swoop, does not prevent LIKELIHOOD OF CONFUSION either. This is prima facie trademark infringement, and as much as I love prospective clients reading the blog and calling me for trademark advice that they might actually pay for, I would love them to learn this first: Trademarks are infringed, not by exact marks, but by marks that are likely to confuse.
But is it counterfeiting? Under the statute
(ii) that is identical with, or substantially indistinguishable from, a mark registered for those goods or services on the principal register in the United States Patent and Trademark Office and in use, whether or not the defendant knew such mark was so registered; and
Does this use meet that test? “Counterfeiting differs from trademark infringement in that it is narrower in scope and applies only to marks made to look identical to the actual [registered] mark,” writes David Quam in chapter 1 of (evidently irreplaceable) Trademark Counterfeiting (pp. 1—4-5) (emphasis added). This is a distinction with at least a theoretical difference: unlike garden-variety infringement, trademark counterfeiting comes with potentially massive statutory damages for willful infringement.
It’s a bit of a trick question, because as I understand it, NIKE has registrations for the Swoosh device (see definition 3 here if you’re not a trademarks person or you’ve otherwise wondered about the use of this word) itself, for the work NIKE along with the Swoosh device, and of course for the word NIKE as well (I could not find all three in the TEAS database). I don’t think that HIKE for NIKE even comes close to being a counterfeit, and axiomatically that would go for its use along with the Swoosh in that combination word and design mark.
So we are left with what we may call the Fanged Swoosh (with due apologies). Is that “made to look identical” to the Swoosh Itself? Do we credit a deviation from a design of perhaps 4% in space area, which is incorporated into the design solely to evade counterfeiting liability? Or do we acknowledge that this is not just any 4%, but an infinitely large “percent” — the difference between zero interruptions along the upper arc of the Swoosh, and one?
This isn’t a counterfeit. It’s obviously willful infringement, and the defendant is liable for attorneys’ fees based on such flat-footed willfulness even under the old-fashioned infringement standard. Damages? No “statutory damages” — also an elusive concept — but on some level you have to prove them, though in Lanham Act cases that is a very fluid concept indeed. You’re entitled to trebling under the Lanham Act, and punitives, too, under state law claims. At the end of the day, the difference in such a gross knockoff case is likely to be mostly academic.
But surely we should not be counterfeiting counterfeiting!
Now go look at Knockoff News!
UPDATE: To top the foregoing demonstration of the difference between an infringement and a counterfeit, Susan graciously explains the real difference between an “N” and an “H” in the land of the Bear — or is it in fact the difference between a Yale Law degree and the Bargain Brand?