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trademark wars

Levi's, VW Brands Help Nike Win US Supreme Court Trademark Ruling

Posted by Mark J. Miller on January 9, 2013 06:02 PM

Nike’s Air Force 1 just celebrated 30 years, hitting stores way back in 1982 as the first basketball shoe to use its Nike Air technology. It’s been a huge success for the brand, and has become a collector’s item for sneakerheads. Its recent appearance in front of the Supreme Court, normally a place where sneakers don't dare to tread, may only increase its appeal to collectors.

The trouble began back in 2009 when a small shoemaker, Already LLC, which makes Yums sneakers was sued by Nike for infringing on its Air Force 1 trademark with the design of its Soulja Boy shoes.

The Yums brand owner responded countersued before Nike “issued a covenant not to sue, promising not to raise any trademark or unfair competition claims against Already or any affiliated entity based on Already’s existing footwear designs, or any future Already designs,” World Trademark Review reports. “Nike then moved to dismiss its claims with prejudice, and to dismiss Already’s counterclaim without prejudice on the ground that the covenant had extinguished the case or controversy.”

Already was not interested in everything just being dismissed like that and was likely feeling a bit bullied by its much larger competitor. The case worked its way up through the courts, finally taking up the time of the justices of the Supreme Court, where on Wednesday (Jan. 9) Chief Justice John Roberts ruled once and for all that Nike wins and was allowed to dismiss the case.

Interestingly, two companies with well-known trademarks and brands—Levi's parent Levi Strauss & Co and VW automaker Volkswagen AG—filed briefs supporting Nike.

Even though it was a unanimous decision, however, “Justice Anthony Kennedy, joined by Justices Samuel Alito, Clarence Thomas and Sonia Sotomayor warned that future cases may force the court to make a stricter definition of when companies can end all litigation by declaring they have dropped their claims,” Reuters reports.

Some fear that the victory for Nike could stifle innovation if large companies use such litigation tactics to curtail smaller companies, but the justices suggested that there was nothing to worry about.

As Reuters noted,

Roberts also agreed with Nike that Already was unlikely to produce any shoe that would not be protected. "If such a shoe exists, the parties have not pointed to it, there is no evidence that Already has dreamt of it, and we cannot conceive of it," Roberts wrote. "It sits, as far as we can tell, on a shelf between Dorothy's ruby slippers and Perseus' winged sandals."

Justice Anthony Kennedy concurred in the decision, saying that other companies should not assume they can automatically end rivals' trademark cases with covenants similar to Nike's. Justices Clarence Thomas, Samuel Alito and Sonia Sotomayor joined Kennedy's concurrence.  

• Visit the Interbrand blog for a look back at some of the more memorable trademark suits of 2012

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