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A $16 million Nike campaign landed the sportswear behemoth at the center of a lawsuit in the summer of 2019. According to the complaint that it filed in a federal court in North Carolina in August 2019, Fleet Feet accused Nike of running afoul of its federally protected trademarks “Change Everything” and “Running Changes Everything,” arguing that Nike’s national campaign was trampling on the marks it has used since 2012, and confusing consumers in the process.

Fleet Feet alleged in its complaint that despite Nike being well aware of its trademarks since it stocks its footwear in Fleet Feet’s chain of nearly 200 stores, the sportswear giant opted to use the marks anyway. In fact, Fleet Feet argued that Nike initially went so far as to use the “Running Changes Everything” phrase – its exact trademark – on the Nike website, prompting Fleet Feet to complaint and Nike to swap “running” with “sport.” When Nike refused to abandon its use of the allegedly still-infringing mark, which Fleet Feet said is the “cornerstone [of] its brand,” the retailer filed suit, asking a federal court to stop Nike from making use of the trademark-protected phrase and pay an array of monetary damages in a sum to be determined at trial.

In an early win for Fleet Feet, U. S. District Judge Catherine Eagles of the Middle District of North Carolina awarded the Carrboro, N.C.-headquarted retailer a preliminary injunction in December 2019 on the basis that it had shown that it is likely to succeed on its trademark claims. The judge found that “Fleet Feet’s distinctive ‘Change Everything’ and ‘Running Changes Everything’ marks have relatively low commercial strength, Fleet Feet’s substantial advertising expenditures are a drop in the bucket compared to Nike’s spending, and Nike’s advertising campaign using the ‘Sport Changes Everything’ phrase is likely to swamp Fleet Feet’s marks in the market and to cause consumers to link Fleet Feet’s marks with Nike.”

Despite Nike’s arguments that Fleet Feet improperly “delayed in seeking a preliminary injunction” and that it “presented no evidence its revenue has begun to decline or that its franchisees are leaving due to the [Sports Changes Everything] campaign” (to which the court stated that “this form of harm takes time to rise to the surface”), the judge sided with Fleet Feet, noting that “Nike had the option to perform a trademark search in advance—or, if it did one, to respond differently—to ensure its planned campaign would appropriately respect other companies’ marks and would not be subject to court action.”

In the wake of the court’s preliminary injunction decision, one that put a swift hold on the nearly $20 million campaign that Nike planned to use through the 2020 Super Bowl, Nike filed an appeal with U.S. Court of Appeals for the Fourth Circuit, arguing that the injunction was a restraint on free speech. To be exact, counsel for Nike asserted that the lower court “committed several legal errors in failing to recognize that Nike did not use the tagline as a trademark, that Nike’s use was merely descriptive in the sense required for fair use, and that Nike did not act in bad faith in selecting the term.” 

As Dorsey & Whitney LLP’s Tiffany Shimada noted at the time of Nike’s appeal filing, the Beaverton, Oregon-based giant contended that “advertising taglines are frequently short lived and therefore, not always intended to become source indicating, though the relevant legal question is whether consumers thought the ‘Sport Changes Everything’ phrase was source indicating—and if they did, were they likely to be confused as between Fleet Feet or Nike as the source of the products and services.” 

More than that, Nike alleged that the court’s reverse confusion analysis – in furtherance of which it found that “the evidence is almost non-existent that consumers would connect Nike’s products with Fleet Feet, rather than with Nike, but the evidence is strong that consumers may come to associate Fleet Feet’s marks, and thus, its services and products, with Nike, not with Fleet Feet” – was “also infected by legal errors, especially with respect to actual confusion, intent, and similarity of marks.” 

And now, Nike has been handed another unfavorable ruling. In a decision on Tuesday, a panel of judges for the Fourth Circuit sided with Fleet Feet, which had argued that Nike’s quest to overturn the preliminary injunction was “moot” because the sportswear company had previously admitted that the campaign was only slated to run through the 2020 Super Bowl. Because last year’s NFL event has come and gone, and Nike has not used “any new slogans that are confusingly similar to Fleet Feet’s marks,” the court held that Nike lacks the necessary “legally cognizable interest in the validity of the preliminary injunction” for the court to consider the validity of the injunction.

Nike had argued that “the injunction is a ‘continued restraint’ on speech since it bars any language ‘confusingly similar’ to Fleet Feet’s trademarks,” but as of Tuesday, the Fourth Circuit panel rejected that argument and determined that there simply is not “any injury for a court to redress” at this point in connection with the previously-issued injunction.

UPDATED (April 5, 2021): “In a joint Friday court filing, the parties asked U.S. District Judge Catherine Eagles to vacate her order blocking Nike from running allegedly infringing ads, citing a confidential settlement agreement that resolves the litigation and related proceedings at the U.S. Patent and Trademark Office,” Reuters reported on Monday.

*The case is Fleet Feet, Inc. v. Nike, Inc., 1:19-cv-00885 (M.D.N.C.).