 sneakers. The rubber-sold innovation of the late 1800s became pop culture staples by the 1970s and 80s, with models like the Adidas Superstar, Puma Clyde, and Nike Air Force I. But it wasn't until the release of the Air Jordan in 1985 that sneaker fandom became an international obsession. Here at Peep the Kick sneaker convention in New Brunswick, New Jersey, resellers feed sneaker heads voracious appetite for Nikes, especially his Air Jordan line. This pair of all-fight Jordan 1 highs, I'm trying to actually sell it. Resellers act like speculative investors, stocking up on inventory as a bet that prices will rise, sometimes yielding enormous profits. That's $2.20? Appreciate it, bro. You got Instagram? But there is one person here who is not selling Jordans, at least not as Nike conceived of the shoe. He goes by the name Naughty and sells a reimagined version of an Air Jordan 1 under his own independent clothing label Global Heartbreak. We own our third shoe. He's part of a controversial segment of the sneakers market. Small label designers who make products derivative of Air Jordan's and other Nike models. It's all just trying to push our work, trying to push the next man. I got a platform, why not use it? Naughty runs his label out of his apartment in North Brunswick, New Jersey. This is my closet, man. Right now this is probably the only OGs I have. I got them restored like twice because they start the yellow, they start to crack. Black Air Force Energy. These is only 50 made. I probably spent the most money on these. This might have been a bad purchase. COVID happened and school kicked us out. We had 60% of our dorming back and I was like, oh yeah, let me just make a dumb decision. And these were like 1800. Naughty began Global Heartbreak with only $50 to his name, steadily building a following through Instagram over the past six years. This is supposed to be the needle and this is the broken heart. And the situation I was going through, which is the heartbreak, and then the needle would be clothing, but then it takes the two people to mend the broken heart and sew it back up together. Naughty works on sneaker designs with this childhood friend who goes by Teeb. My art is best when I feed off of other people's ideas and Naughty is just somebody that like we just click. Remember when I had the little carrot? Yeah, why didn't you take that off? Because it was ugly. In today's decentralized makers economy, despite running a small independent clothing label, Naughty was able to contract directly with a manufacturer in China to produce his inventory. I'm sending them a file of exactly what I want. I asked the manufacturers to send videos of the whole process from scratch. You could get a good sneaker for about $65. We sold 100 shoes at $150. We didn't even triple profit. I don't like to break pockets. I want the people from where I'm from to be able to purchase it. We made money back, but it was more so about pushing the art. Although Naughty and Teeb don't produce enough shoes for Nike to take notice, the sneaker giant has been cracking down on derivative designers. The most high profile lawsuit is against trendsetting fashion brand of bathing ape or BAPE for short. BAPE is a really important Japanese streetwear brand that started in the 1990s, was embraced by hip hop superstars Jay-Z and Pharrell, probably the biggest among them. Brendan Dunne is the editor of the leading online sneaker magazine Soul Collector and co-hosts the YouTube sneaker show Full Size Run. BAPE was most known in sneakers for making the BAPEsta, which is a version of the Air Force One that replaces the Nike Swoosh with a shooting star logo across the side. If you look at the shoe and you know anything about sneakers, you know immediately that's based on the Air Force One. I wanted BAPEsta's bad when I was a teenager and I'm happy to own a few pairs now. You know you put this next to a Nike Air Force One and it should be pretty obvious the DNA of the shoes. You don't have to be a sneaker obsessive to see the things that these models have in common. This one came first, this one came later. This year, decades after the original release of the BAPEsta, Nike finally sued BAPE over the design, calling the BAPEsta a knockoff Air Force One saying that BAPE was infringing upon Nike's intellectual property to trade dress around the Air Force One and asking the court to stop BAPE from selling these shoes. And this action from Nike comes amid a wave of recent litigation where they're trying to swap down all these makers who create these shoes that look a lot like Nike shoes and are very much based on the success of Nike shoes. It's hard to know why exactly Nike has been so aggressive recently. I would speculate that there are just more of them now than there ever were before and this looks to Nike like a whole cottage industry that could get out of control. It seems like every six months there's a new version of the Jordan one with a different logo on it. There's some people that are just like, oh, those are knockoffs, those are Fugazies. But then there's some people that really look at it as all right, this is limited, a collectible, like especially when you go hard with the box and then you separate yourself with the colorway. I feel like from like an artistic standpoint, like everything comes from something. Nothing's truly original. Like, yeah, this is something you've seen before, but it's it doesn't take anything away from being personal to us. We usually think that copying actually destroys incentives to innovate. But in the fashion world, copying is actually what creates the incentives to innovate. NYU Law Professor Christopher Sprigman is the co-author of the knockoff economy, how imitation sparks innovation. In the book, he draws a sharp distinction between copyright trademark and trade dress. So copyright protects artistic and literary works. Trademark is about symbols, words, sounds that we use to identify the source of products. Trade dress has a bit of a different flavor to it, which is sometimes the shape of products or elements of the product's construction tell us where the product comes from. Trade dress is enforced in the fashion industry occasionally. But what you get in a lot of lawsuits is some pretty dubious claims of design being recognizable. When these lawsuits happen, inevitably, the Nike litigators will come up with screenshots from Instagram comments of people who are confused and are thinking this is a Nike shoe on some level. But I believe those people are in the extreme extreme minority and anybody really spending their money on shoes like this knows that Nike didn't produce them or Nike is not involved. Copying helps set trends, trends sell fashion. Copying is what helps kill trends. Copying is what helps set the trend that comes next. So the fashion cycle runs and the fashion industry's successive waves of innovation depend on copying. But Sprigman sees a big difference between derivatives such as babes or knotties designs and replicas or reps for short, which attempt to mimic Nike's models exactly, making them a clear case of trademark infringement. Replica sneakers is not something that I personally am a fan of. It's totally fake. It's what we call in the street food. We don't do replicas replicas are not it. I was always taught you can't afford it. Don't wear it. I would never ever wear a replica sneaker. But when you think about fake sneakers from the era when I started collecting, they were more obviously fake. A lot of the money spent these days on replica sneakers has to do with recreations of shoes that are not authorized by the companies but still look exactly like and feel exactly like or as close to exact as possible. I think it's definitely ironic if you consider the fact that some of these shoes, the fake ones versus the real ones are made in the same factories by the same labor force. That is one of the harder pieces to really square away in terms of not wanting to ever wear fake shoes. So if we look at the placement of the Nike air on the label, you can see that the air level at the bottom is placed slightly higher and the label is actually a lot smaller and tighter on the fake pair compared to the retail one. Videos like this help buyers distinguish between replicas and the real thing. But most sneaker heads aren't fooled by replicas. They buy them knowingly because the differences are so subtle and the real thing is out of reach. So Nike and Adidas in a sense have learned what the luxury goods game is about and they're getting into that game. They purposely manufacture fewer than could be sold. They create scarcity. This scarcity helps create a mania. This mania helps drive up the price on secondary markets. It seems to me that that kind of behavior is going to call forth counterfeits the way rain calls forth flowers. That's just the way the world works. Unlike with knockoffs, Sprigman believes that companies have a legitimate case against replicas, but also sees it as a form of class bias. People should understand what they're getting. But if a person buys a counterfeit and is not fooled, I guess the problem is that you'll be walking out in the world with a very high quality counterfeit luxury good that other people will mistake for the real thing. When they mistake it for the real thing, they will impute to you the status that in a sense you don't have. We have to ask ourselves, are we really in the business of regulating people's status? That's a business that says that the person without a lot of money cannot essentially signal to the world that they have the kind of taste or that they have the kind of means that a person with more money has. This is a way of segmenting us by economic class using intellectual property law as the means. And that is a very normatively unattractive thing for intellectual property law to be doing. I do think Nike's doing fine, but I do still think it's in their best interest to combat counterfeits and knockoffs because I believe that does divert revenue away from them. But I feel like Nike's battle against bootleg makers is a game of whack-a-mole more than anything else. Bape is still selling at sneakers and the company has filed for dismissal of Nike's lawsuit. A handful of other cases have been dropped or settled out of court with derivative designers agreeing to stop selling their products. It's still not clear if Nike's legal campaign will succeed in shutting down this segment of the sneakers market. I see myself expanding. I think kids now are open to wearing different shoes outside of just Nike, Jordans. There's so many creators just because I feel like social media plays a big part. Fashion creativity comes from designers looking at what other designers are doing and playing with those ideas. Copying is part of the cycle that drives the industry forward.