Already LLC v. Nike (2012)
- Docket
- 11-982
- Decided
- 2012-01-01
Summary
Question: Did Already's counterclaim create a justiciable controversy sufficient to allow the District Court to exercise subject matter jurisdiction? Conclusion: No. Chief Justice John G. Roberts, Jr., writing for a unanimous court, affirmed the Ninth Circuit. The Supreme Court held that Nike's covenant not to sue made the case moot. Nike met its burden to show that it "could not reasonably be expected" to resume trademark enforcement action against Already. The language of the covenant was broad enough that the Court could not conceive of a shoe that would fall outside of its scope. The Court also rejected Already's assertion that dismissing the case would allow Nike to enforce invalid trademarks against any competitor by continually issuing covenants not to sue. Nike has an incentive not to do this because allowing many competitors to use Nike's marks, or confusingly similar ones, could lessen the strength of Nike's mark. Justice Anthony M. Kennedy concurred, emphasizing that covenants not to sue should not be a first reaction to trademark litigation. Courts should be wary of large companies intentionally burdening smaller competitors with infringement actions only to turn around and promise not to sue after learning valuable future business information. A covenant not to sue should only terminate litigation when it meets the high burden required by in this case. Justice Clarence Thomas, Justice Samuel A. Alito, Jr., and Justice Sonia Sotomayor joined in the concurrence.