Trademarks: Sometimes Calling It Quits Is the Best Course of Action
Last year, the Supreme Court handed down a decision in a trademark case that in essence had nothing to do with trademarks. The original battle at the lower court was over a line of shoes and trademark owned by Nike called Air Force 1s, which another company, Already, claimed was an invalid trademark. Already designs and manufactures shoes – including the lines “Sugars” and “Soulja Boys” – which Nike claimed were infringing their mark according to the Supreme Court opinion.
In what seemed like an unusual twist just months after Nike filed its original lawsuit, Nike issued a “Covenant Not to Sue” Already, stating that Nike would not involve the courts in any trademark or unfair competition claim based on Already’s existing line of shoes or any future shoes substantially similar to any of the existing lines. This was like Goliath extending an olive branch to David. Already took that olive branch, however, and continued to try and beat Nike out of the truce.
This is the issue that went all the way up to the high Court: whether Nike’s promise not to sue made Already’s attempt to declare Nike’s trademarks invalid a worthy cause of action. In order to get to the Supreme Court, or any federal court for that matter, there is an old rule that has been on the books since March 4th, 1789. This is the Case or Controversy rule found in the United States Constitution. In order to proceed with a lawsuit, there must be a Case or Controversy at all times during litigation. When there fails to be a Case or Controversy, there fails to be a lawsuit that a court can preside over, be it a district court or the Supreme Court.
In this case, when Nike dropped the lawsuit and promised not to sue now or ever again for trademark infringement or unfair competition, there was no longer a controversy. Already’s claims therefore became moot and the Supreme Court eventually agreed. The good news is that despite the outcome, Already can sell oodles of “Soulja Boys” shoes and not ever have to worry about a trademark infringement lawsuit form Nike ever again.
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