The dispute arose after Nike sued rival Already (also known as Yums) in New York for infringement of its US trade mark 3,451,905, which covers the shape of its Air Force 1 shoe. Already counter-sued, seeking cancellation of the mark on the grounds that it was invalid, as well as a declaration that its own shoes did not infringe.
Soon after Nike withdrew the suit, and gave a broad covenant not to sue covering Already’s existing footwear product designs “and any colorable imitations thereof”.
But Already persisted with its counterclaims. Nike therefore asked the court to dismiss them.
The district court agreed with Nike, saying there was no longer any “case or controversy” between the parties. The Court of Appeals for the Second Circuit agreed.
Ruling on January 9, the Supreme Court also agreed, saying that the broad covenant not to sue made it absolutely clear the case is moot and that Nike had met the stringent requirements of the voluntary cessation doctrine.
But in a concurring opinion, four judges warned that covenants such as that given by Nike “ought not to be taken as an automatic means for the party who first charged a competitor with trademark infringement suddenly to abandon the suit without incurring the risk of an ensuing adverse adjudication”.
Already can still seek cancellation of the trade mark at the USPTO if it wishes.
INTA submitted an amicus brief in the case and reported on the decision.
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