Trademark holders no longer have to worry about not being able to dismiss a case by entering into a properly drafted covenant not to sue. In Already, LLC, dba Yums v. Nike, Inc., the Supreme Court unanimously affirmed the Second Circuit’s opinion by ruling that Nike’s covenant not to sue Yums for trademark infringement was sufficiently broad to render moot Yums’ challenge to the validity of Nike’s asserted registration. Yums had no reasonable apprehension of litigation and Nike met its burden of showing that Yums could not be sued later. Chief Justice Roberts delivered the opinion, which required a high standard for parties issuing the covenant, as they bear a “formidable burden” to establish that it is “absolutely clear” that the allegedly wrongful conduct cannot reasonably be expected to reoccur. Remand was not necessary under the circumstances, because the Court found that it “cannot conceive” of any shoe that Yums could make “that would potentially infringe Nike’s trademark and yet not fall under the Covenant.” Arguably, the Court construed the covenant so broadly as to exclude a claim of infringement based on Yums’ sale of the exact shoe covered by Nike’s challenged registration.
Tagged: Covenant Not To Sue
Yums v. Nike Update — Two Amicus Curiae Briefs Filed: One Arguing Vacatur and Remand and the Second in Support of Yums
Last week, in a prior blog, we reported that Petitioner Already, LLC d/b/a Yums (“Yums”) filed its opening brief with the Supreme Court, arguing that a trademark registrant’s post-suit covenant not to sue does not divest a Federal District Court of standing to review a challenge to the validity of the underlying trademark registration.
In a prior blog, we reported that the Supreme Court had granted certiorari in Already, LLC dba Yums v. Nike, Inc., No. 11-982, to an appeal from the Second Circuit’s decision affirming the Southern District of New York’s holding that a covenant not to sue entered in a trademark dispute ended the case and controversy between the parties.
Yesterday, the Supreme Court granted certiorari in Already, LLC dba Yums v. Nike, Inc., No. 11-982, an appeal from the Second Circuit’s decision that affirmed the Southern District’s holding that a covenant not to sue entered in a trademark dispute between Nike and Yums ended the case or controversy between the parties. The lower court also dismissed defendant’s counterclaims, which the Second Circuit also affirmed. See Nike, Inc. v. Already, LLC, 663 F.3d 89 (2nd Cir. 2011) (Lohier, J.).