Case(s): Already, LLC v. Nike, Inc., 568 U.S. 85 (2013)
Facts: Nike, Inc. (Nike) sued Already, LLC (Already), alleging trademark infringement and dilution. Nike claimed that Already’s “Sugarpak” and “Soulja Boy” sneakers infringed on Nike’s Air Force 1 trademark. Already denied the allegations and counterclaimed for a declaratory judgment of non-infringement and invalidity of Nike’s trademark.
District Court and Second Circuit Decisions
The district court dismissed Nike’s claims as moot, finding that there was no longer a case or controversy between the parties. The court also held that Already had established a sufficient threat of litigation to support its counterclaims. The U.S. Court of Appeals for the Second Circuit affirmed the district court’s decision.
Supreme Court Decision
Issue: Whether a case or controversy still exists when a trademark owner issues a covenant not to sue to the alleged infringer, and whether the covenant not to sue moots the case.
The Supreme Court held that the case was moot, as Nike’s covenant not to sue Already for its current or future products that infringe Nike’s trademark deprived Already of the necessary concrete and actual injury required to establish a case or controversy. The Court explained that when a trademark owner issues a covenant not to sue to an alleged infringer, the covenant removes any threat of litigation and eliminates the possibility of a case or controversy. The Court also held that a covenant not to sue that covers not only the allegedly infringing product, but also all future “colorable imitations” of that product, moots the case because it eliminates any possibility of injury to the alleged infringer. The Court further held that the fact that Nike’s covenant was voluntary did not prevent the covenant from being an effective means of mootness.
The Supreme Court affirmed the Second Circuit’s decision, holding that the case was moot and dismissing the case. The Court’s decision clarified that a covenant not to sue can moot a trademark dispute, even if the covenant is voluntarily issued by the trademark owner.