Dive Brief:
- Kanye West and his Yeezy brand filed a lawsuit against Walmart in California over what the musician alleges were copycat shoes sold over the retailer's website.
- West and Yeezy accused Walmart of "flagrantly trading off of West's and the YEEZY brand's popularity" over a pair of imitation shoes modeled after Yeezy's Foam Runner line. Citing comments on Walmart's website and social media posts, West alleged the shoes confused customers and hurt the Yeezy brand.
- In an emailed statement, a Walmart spokesperson said: "The product referenced in the complaint is not sold by Walmart, but rather by third party Marketplace sellers. We take allegations like this seriously and are reviewing the claim. We will respond in court as appropriate after we have been served with the complaint."
Dive Insight:
As Amazon knows well, running a third-party marketplace can be a profitable way to expand assortments and inventory online. Walmart, along with many of its retail peers, has been expanding its marketplace as retailers fight over digital market and wallet share. But with sales and profits come plenty of headaches — as Amazon also knows well.
The e-commerce giant has been the target of numerous lawsuits by brands that have been burned by online counterfeits and knockoffs. The plaintiffs in those cases have tried to chip away at Amazon's status as a neutral platform, which gives it and online platform operators legal protections against liability.
Over the years, as marketplace counterfeits have come into the spotlight, Amazon has responded by investing resources in anti-counterfeiting technology and operations, and by pursuing counterfeiters along with brands.
If marketplaces are a headache for the marketplace owner, they can be an even bigger headache for brands. While Amazon and its peers may move as quickly as they can to take down counterfeits, counterfeiters often move even more swiftly, creating what has often been described as a game of whack-a-mole for brands trying to keep knockoffs of their products from proliferating online.
As with the case of Yeezy — which could not identify the names of individual sellers of the brands' shoes found on Walmart's e-commerce site — the sellers can often be impossible to identify, find and bring to account. Some brands have argued that marketplace operators aren't doing nearly enough to vet sellers and prevent fakes from appearing on their sites to begin with.
Brands can be hurt in multiple ways in the time between a product's appearance and removal. In their complaint, West and Yeezy said that "[n]ot only are Plaintiffs losing market share for their authentic YEEZY FOAM RUNNER, but also their reputation and the goodwill of the YEEZY brand is being harmed by the association with the Imitation Shoe given its subpar quality."
The shoe being sold on Walmart's website the plaintiffs describe as "an unauthorized exact copy of the YEEZY FOAM RUNNER in every respect, including the clog-silhouette, foam slip-on body, and characteristic varying-sized cutouts on the sides and top of the shoe."
The complaint cites specific customer comments from Walmart's site that conflate the shoes with Yeezy's foam running shoes, including one customer who called the shoes "budget Yeezy Foam Runners" and another who said, "My son has been wanting the yeezy slides but these look similar and are much more affordable." The plaintiffs allege that those comments and others "should have alerted Walmart to the presence of an imitation good being sold on its website."
According to the complaint, Yeezy and West's attorneys sent Walmart an infringement claim on June 23 demanding the shoes be immediately removed. Media have reported Walmart removed the shoes in recent days. Along with asking for the sales of the shoes to stop, West and Yeezy are seeking monetary damages.
This is not the only intellectual property tussle between Yeezy and Walmart. The retailer recently sought to block Yeezy from using a trademark that Walmart thought was too similar to its own.
