Already, LLC v. Nike, Inc.

Supreme Court Case involving: trademarksbusiness promises

Background: In July 2009, Nike, Inc. filed suit against Already, LLC for selling shoes similar to its Air Force 1 shoe, a design with multiple federal trademarks owned by Nike. In November 2009, Already, LLC counterclaimed to cancel Nike’s trademark. In a move to avoid further litigation, Nike dropped its claim and promised it would not assert its trademark against any of Already’s previous, current, or future products. A district court dismissed the counterclaim and the court of appeals affirmed the dismissal. While it consented to the dismissal of Nike’s infringement claim, Already still wanted to move forward in its attempt to invalidate the Air Force 1 trademark.

Opinion Summary: The court unanimously ruled in favor of Nike, Inc., upholding the dismissal of Already’s suit to invalidate the trademark. Already had a right to bring its own lawsuit against Nike because it was being sued for illegal copying. Once Nike decided it was not being commercially hurt by Already’s shoes (and that there was a threat against their trademark in the counterclaim) they sent a formal document that promised not sue. Already had to prove that there was potential legal controversy between the two companies to continue with its suit. The Court found that Nike’s formal promise not to sue was sufficient to end the case.

For further review.

Implications: In the opinion the Court made sure to address case-ending promises not to sue. It advised that companies cannot get out of lawsuits simply by ending the challenged conduct that prompted the suit in the first place. If a company wants to have a case declared moot when sued they have the burden of showing unequivocally that the behavior leading to the suit would not reasonably be expected to recur.