Nike wins trademark case in Supreme Court

Wed Jan 9, 2013 4:35pm EST
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By Jonathan Stempel

WASHINGTON (Reuters) - Nike Inc (NKE.N: Quote) won a victory at the U.S. Supreme Court barring a smaller rival from suing to void the company's trademark for its top-selling Air Force 1 sneakers.

Chief Justice John Roberts wrote for a unanimous court on Wednesday that Nike's promise not to pursue an infringement lawsuit against Already LLC, maker of Yums sneakers, meant that the Texas company could not pursue its own trademark challenge.

"Already's arguments boil down to a basic policy objection that dismissing this case allows Nike to bully small innovators lawfully operating in the public domain," Roberts wrote. But the argument did not justify letting its lawsuit proceed, he wrote.

Wednesday's decision upheld a November 2011 ruling by the 2nd U.S. Circuit Court of Appeals in New York.

James Dabney, a lawyer for Already, did not immediately respond to requests for comment. Nor did Nike.

Wednesday's decision may help companies such as Nike rival Adidas SE (ADSGn.DE: Quote) and luxury goods makers Coach Inc (COH.N: Quote) and LVMH Moet Hennessy Louis Vuitton SA (LVMH.PA: Quote), which often sue to prevent alleged imitators from interfering with their revenue streams and customer goodwill.

The case began in 2009, when Nike claimed in a lawsuit that Already's Sugar and Soulja Boy shoes infringed Nike's trademark on the stitching, eyelet panels and other features of Air Force 1. Nike, based in Beaverton, Oregon, launched the low-cut Air Force 1 sneaker in 1982 and sells millions of them each year.

After Already countersued to void the trademark, Nike dropped its lawsuit, believing Yums was not a commercial threat, and gave a promise in the form of a covenant not to sue Already.   Continued...

Nike running shoes are displayed at the U.S. Olympic athletics trials in Eugene, Oregon in this June 21, 2012 file photograph. REUTERS/Mike Blake/Files