Case Summary: The Supreme Court grants a writ of certiorari in a
dispute over whether a shoe design for which Nike holds a trademark registration
is in the public domain.
Key Takeaway: Petitioner argues that public interest in cancelling
invalid registrations should trump existence of a covenant not to sue.
By Anandashankar Mazumdar
Whether the public interest should allow a trademark registration
cancellation claim to go forward in the face of a finding of an absence of case
or controversy will be weighed as a result of the granting of a writ of
certiorari on June 25 by the U.S. Supreme Court (Already LLC d/b/a Yums v.
Nike Inc., U.S., No. 11-982, review granted 6/25/12).
The case involves a trademark dispute between the makers of Nike and Yums
footwear, which Nike sought to end by delivering a covenant not to sue. However,
the Yums maker wanted to proceed with its claim that the relevant trademark
registration held by Nike should nevertheless be cancelled.
The dispute began with Nike Inc., a well-known designer and manufacturer of
apparel, particularly athletic shoes. In 1982, Nike designed and began
distributing its Air Force 1 sneaker. Since then, Nike has issued more than
1,700 color variations of the Air Force 1. Nike holds several U.S. trademark
registrations related to the appearance of the Air Force 1.
Already LLC d/b/a Yums is a competing footwear maker. In 2009, Nike sued
Yums, alleging that Yums's Sugar and Soulja Boy shoes infringed its trademark
rights. Yums counterclaimed, seeking cancellation of one of Nike's trademark
In 2010, Nike presented a “covenant not to sue” to Yums, seeking to settle
the dispute and agreeing not to pursue further trademark action against Yums.
Yums argued that, despite the covenant, there was a persisting case or
Judge Richard J. Sullivan of the U.S. District Court for the Southern
District of New York dismissed Nike's claims with prejudice and dismissed Yums's
counterclaims without prejudice.
On appeal, the U.S. Court of Appeals for the Second Circuit affirmed the
lower court's conclusion that upon delivery of the covenant not to sue, the
court was divested of subject matter jurisdiction under the case or controversy
requirement of Article III of the U.S. Constitution(222 PTD, 11/17/11).
Yums then petitioned the Supreme Court for a writ of certiorari, arguing that
there was a split among circuits and also that the Second Circuit's ruling was
inconsistent with Supreme Court precedent (34 PTD, 2/22/12).
Furthermore, according to the petitioner, the Second Circuit's rule was in
conflict with the public interest in challenges to the validity of registered
“The alleged 'trademark' at issue is a shoe configuration that entered the
public domain nearly 30 years ago,” the petition argued. “Whether the shoe
configuration can rightly be deemed a 'trademark,' and as such protected against
imitation in perpetuity, is a question in which 'the consuming public is deeply
In its brief in opposition, Nike disputed the claim of a circuit split. The
Ninth Circuit decision that Yums alleged was in conflict with the Second Circuit
was Bancroft and Masters Inc. v. Augusta National Inc., 223 F.3d 1082, 55
USPQ2d 1941 (9th Cir. 2000).
According to Yums, Bancroft “held that a promise not to assert a
registered trademark against an accused infringer's existing activities did not
divest the district court of Article III jurisdiction to hear the accused
infringer's claim challenging the validity of the asserted mark.”
Nike countered that Bancroft, however, was based on a finding that
“the offer of settlement in that case was 'incomplete and qualified.' ”
Nike further asserted that other courts had refused to follow
Bancroft. This claim was disputed by Yums in its reply brief, which
characterized Nike's brief as erroneously applying the standards of a
declaratory judgment action to the matter.
Nike is represented by Thomas C. Goldstein of Goldstein & Russell,
Washington, D.C. Yums is represented by James W. Dabney of Fried, Frank, Harris,
Shriver & Jacobson, New York.