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Nike Makes Case to the Supreme Court

November 07, 2012

​Jed Wakefield, chair of Fenwick’s Trademark Litigation group, was quoted in two articles, “Nike Makes Case to the Supreme Court” in the Portland Business Journal and “Justices Eye Nike’s Deal Not to Sue in Trademark Case” in Law360.

On November 7, the Supreme Court heard oral arguments in a three-year-old case involving a trademark dispute between Nike and Already LLC (Already LLC v. Nike Inc.). The case dates back to 2009 when Nike filed a trademark infringement suit against Already and its Yums footwear brand, alleging the company was infringing on Nike’s trademarked Air Force 1 footwear design.

Yums proceeded to file a counterclaim, attempting to invalidate the trade dress registration. Nike then withdrew its claim and issued a covenant not to sue, but Yums still pursued their attempts to cancel Nike’s registration.

Nike has prevailed in the lower courts, and now the Supreme Court is considering whether accused infringers can still challenge a trademark's validity after the owner agrees not to sue.

Wakefield said the case has received significant attention from intellectual property groups out of the fear that a ruling against Nike could pave the way for frivolous lawsuits against trademark or patent holders. “The risk would involve the potential for increases in opportunistic strike-suit claims, where a party could say, ‘I’m going to challenge the validity of your patent even though you’ve never threatened me with it, unless you pay me’,” Wakefield said.

He said the likelihood of that outcome is remote, but the specter of its possibility was enough to compel groups such as the American Intellectual Property Law Association and the International Trademark Association to file Amicus briefs in the case.

But Wakefield said the company's argument all along has been that companies in Yums’ situation can always request that a trademark be canceled with the U.S. Patent and Trademark Office, offering an adequate alternative outside of the venue of a courtroom.

According to Wakefield, the detailed questions about the specific covenant in this case during oral argument suggest that the justices may be taking a more limited view. “The decision might be very narrowly tailored to the nature of that covenant and whether it adequately provided assurance to Already that it would not be sued again," he said. "In that case, I would not expect a broad, sweeping opinion that would unsettle people's expectations about declaratory judgment standards."​