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11-982 ALREADY, LLC V. NIKE, INC. DECISION BELOW: 663 F.3d 89 CERT. GRANTED 6/25/2012 QUESTION PRESENTED: Whether a federal district court is divested of Article III jurisdiction over a party's challenge to the validity of a federally registered trademark if the registrant promises not to assert its mark against the party's then-existing commercial activities. LOWER COURT CASE NUMBER: 11-314-CV
In the 2012 case of Already, LLC, dba Yums v. Nike, Inc., the U.S Supreme Court was asked to determine whether a federal court could hear a challenge to the validity of Nike's trademark after Nike had issued a "covenant not to sue" Already for any future potential violations. The dispute began when Nike sued Already for infringing on its Air Force 1 sneaker design. In response, Already counterclaimed that Nike's trademark was invalid. However, before the court could decide on this issue, Nike issued an unconditional and irrevocable covenant not to sue or make any claim against Already regarding its current footwear designs or any future designs that constituted a “colorable imitation” of its current products. The question then arose as to whether there remained an actual controversy between parties sufficient enough for Article III jurisdiction in federal courts once one party has promised not to enforce its rights against another party’s actions going forward. The Supreme Court held unanimously that such covenants can indeed moot a defendant's counterclaim challenging the validity of plaintiff’s intellectual property right because they eliminate any case-or-controversy required by Article III.
In the case of Already, LLC, DBA Yums v. Nike, Inc., there was no dissenting opinion as the decision was unanimous. The Supreme Court ruled in favor of Nike with a 9-0 vote. The court held that a covenant not to enforce a trademark against another party's similar product moots the other party's action to have the trademark declared invalid. This ruling came after Nike issued such a covenant to Already, LLC but Already proceeded with their suit anyway.