Jury awards Nike $11 million in counterfeit sneaker case

A federal jury in Los Angeles on Thursday delivered an $11 million verdict for Nike against a fashion influencer whom the athletic apparel company accused of selling counterfeit Nike products through social media.

The jury found defendant Nicholas Tuinenburg and his fashion label, Divide the Youth (DTY), willfully counterfeited Nike products and infringed trademarks and trade dress related to Nike shoes, but declined to award the total $18 million sought by Nike in the case.

The verdict quickly followed closing arguments on Thursday where Nike reiterated claims that Tuinenburg continued to promote and sell counterfeit Nike goods despite legal actions and raids.

"He didn't stop promoting fakes, accepting fully paid luxury trips to Bali and to China so he could appear in more social media content promoting the sale of counterfeit goods, glorifying a luxury counterfeit influencer lifestyle," Tamar Y. Duvdevani of DLA Piper US in New York told the jury on behalf of Nike.

In response, Tuinenburg's counsel downplayed the impact of his counterfeit sales on Nike, stating that he sold 384 pairs of shoes for a total profit of roughly $56,000.

"That matters because Nike wants the story to sound enormous, and that DTY made millions out of this shoe, but your job is to focus on what the evidence actually proved," Tuinenburg's attorney, Louise Jillian Paris of Omni Legal Group in Los Angeles, told the jury.

Nike alleged that Tuinenburg knowingly and intentionally participated in trademark infringement and counterfeiting by marketing and selling "replica" footwear through social media platforms and websites such as W2C.net. Nike contends that DTY's "Division Dunks" unlawfully replicated its protected "DUNK" trade dress, leading to a likelihood of consumer confusion and harming Nike's brand reputation. Nike, Inc. v. Tuinenburg et al., 2:23-cv-10495 (C.D. Cal., filed Dec. 14, 2023).

In response, Tuinenburg acknowledged that he produces replica products but denied that he ever presented them as authorized or approved by Nike. In a defense memorandum submitted in January, DTY asserts that its products are sufficiently distinguishable, incorporating a distinctive star logo and marketing materials that explicitly identify DTY as the source, thereby avoiding any likelihood of consumer confusion. His attorneys also maintain that Tuinenburg's actions are protected under doctrines of fair use as well as the First Amendment.

In her closing argument on Thursday, Paris argued that Nike had failed to prove that Tuinenburg's shoes were likely to cause confusion with Nike products among consumers.

"The evidence showed that the Division DUNKS were released under the DTY name, promoted through DTY social media, and featured DTY's own branding on the tongue, heel, insole and sides of the shoe," she said.

Paris further argued that Nike had failed to provide any accounting to support its high request for damages.

"$18 million -- that number did not come from a damages expert, it did not come from a financial analyst," Paris said, adding that the figure is "simply the maximum number that the statute allows."

Tuinenburg's intent, Paris argued, had not been to harm Nike or exploit its IP, but to break into sneaker culture.

"He wanted to belong in that world socially," she said. "Those products mattered, but they often were not available to him. That is not an excuse, but it is context, and context matters when Nike asks you to assign the harshest possible intent to every decision that he made."

On behalf of Nike, Duvdevani argued that the high amount was necessary to fulfill the compensation, punishment and deterrence aspects of statutory damages.

"If anything, a willful counterfeiter should feel the sting of a statutory damages award," she said. "You have seen the evidence of the scope and scale of defendant's willful counterfeiting. He made himself and his partners a ton of money counterfeiting. He proudly posted about it and influenced others to buy fakes, even teaching them how to do it because it got him more money."

Counsel for the parties declined to comment following the verdict on Thursday.