Wednesday, January 9, 2013
Today the Supreme Court issued its decision in Already, LLC v. Nike, Inc., covered earlier here and here. The unanimous opinion by Chief Justice Roberts begins: “The question is whether a covenant not to enforce a trademark against a competitor’s existing products and any future ‘colorable imitations’ moots the competitor’s action to have the trademark declared invalid.”
Recognizing that “[a] case becomes moot—and therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article III—when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome” [Slip Op. 4], Chief Justice Roberts proceeds to apply the voluntary cessation doctrine. [Slip Op. 6-14.] He concludes:
Already’s only legally cognizable injury—the fact that Nike took steps to enforce its trademark—is now gone and, given the breadth of the covenant, cannot reasonably be expected to recur. There being no other basis on which to find a live controversy, the case is clearly moot. [Slip Op. 13-14]
There was also no need to remand the case for further proceedings: “The uncontested findings made by the District Court, and confirmed by the Second Circuit, make it absolutely clear this case is moot.” [Slip Op. 15]
Justice Kennedy authors a concurring opinion that is joined by Justices Thomas, Alito, and Sotomayor. He writes [Concurring Op. 2]:
This brief, separate concurrence is written to underscore that covenants like the one Nike filed here ought not to be taken as an automatic means for the party who first charged a competitor with trademark infringement suddenly to abandon the suit without incurring the risk of an ensuing adverse adjudication. Courts should be well aware that charges of trademark infringement can be disruptive to the good business relations between the manufacturer alleged to have been an infringer and its distributors, retailers, and investors. The mere pendency of litigation can mean that other actors in the marketplace may be reluctant to have future dealings with the alleged infringer.