The United States Supreme Court has ruled in
favor of Nike Inc. prohibiting a smaller sneaker manufacturer from suing to void
Nike’s Air Force 1 sneaker trademark.
In a unanimous court decision, the Supreme
Court ruled that because Nike had promised not to proceed with a patent infringement lawsuit against Texas-based Already LLC, which manufactures the Yums
sneakers, Already cannot proceed with its own infringement lawsuit. The decision upheld a ruling by the 2nd
US Circuit Court Of Appeals in New York in November 2011.
In 2009, Nike had filed a lawsuit that
claimed that two sneakers, Sugar and Soulja Boy manufactured by Already
infringed on Nike's trademark. The
company claimed that they were infringements on a number of features including
stitching, and eyelet panels.
However, Already then filed a lawsuit to void
the trademark. Soon after, Nike
dropped the lawsuit, and promised under a covenant not to file a lawsuit
against Already. But Already
refused to drop its lawsuit, accusing the bigger sneaker manufacturer of
dropping its lawsuit to avoid jurisdiction.
The Supreme Court has ruled that allowing the
Already lawsuit to proceed would encourage other companies to use the threat of
lawsuits as a weapon, instead of a final resort for settlement of
disputes. In the future, Los Angeles patent infringement lawyers
would likely find larger companies filing intellectual property infringement
lawsuits against smaller companies, not because of any threat from these
companies, but merely because they are competitors.
According to the Supreme Court, it was not
possible to rule for Already in this matter, because doing so would mean
similar standards for other smaller companies in the future.
