Already, LLC v. Nike, Inc.
The Court ruled that Nike's broad promise not to sue Already over its shoe designs ended the lawsuit, because Already never showed it planned to make any shoe that could infringe Nike's trademark yet fall outside that promise.
The decision reinforces that a company can end a trademark lawsuit by making an unconditional, broad enough promise not to sue, even while its competitor still wants a court to declare the trademark invalid altogether.
“It sits, as far as we can tell, on a shelf between Dorothy’s ruby slippers and Perseus’s winged sandals.”
The Court's memorable way of saying no infringing shoe outside the covenant could be imagined.
How it got here: A federal trial court dismissed Already's counterclaim as moot; the Second Circuit affirmed; the Supreme Court agreed to review that ruling.
The Case in Depth
What happened
Nike sued a smaller shoe company, Already, claiming two of its sneaker lines infringed Nike's Air Force 1 trademark. Already denied the claims and counterclaimed that Nike's trademark itself was invalid. While the suit was pending, Nike issued a written promise never to sue Already or its business partners over its current shoe designs or close copies of them, then asked the courts to dismiss the whole case as moot.
The question before the Court
Once Nike promised never to sue a small shoe company over its current shoe designs or close copies of them, was there still a live legal fight left for courts to decide?
Why it matters
Businesses accused of trademark infringement can potentially end litigation by issuing a sufficiently broad covenant not to sue, without ever having their trademark's validity tested in court. Companies challenging a rival's trademark now know they must show concrete plans for products that could fall outside such a promise, or risk having their challenge dismissed as moot.
What changes now
This is a final decision on the merits, not a temporary order. The lawsuit is over: Already's counterclaim challenging the Air Force 1 trademark's validity is dismissed as moot, and Nike remains bound by the lower courts' broad reading of its covenant, meaning it cannot sue Already over any shoe short of an exact counterfeit. No further proceedings were ordered.
What this does not decide
The Court did not decide that trademark holders can always moot a validity challenge simply by promising not to sue; it stressed that the promise here was unusually broad and unconditional, and that a company with concrete plans for a genuinely risky new product could still keep its challenge alive.
Concurrences and dissents
Concurrence — Justice Kennedy
Justice Kennedy agreed with the outcome but wrote to stress that the burden of proving a covenant moots a case always falls on the trademark holder, not the accused infringer, and that lower courts here had wrongly placed that burden on Already. He warned that trademark holders should not be able to use last-minute covenants to dodge scrutiny while still disrupting a competitor's relationships with investors and retailers through the pendency of a suit, and urged courts to proceed cautiously before treating such covenants as automatically ending litigation.
How the Court got there
The legal reasoning, step by step
- The Court applied the voluntary cessation doctrine, which asks whether a defendant who claims its own change in behavior has ended a lawsuit can show it is absolutely clear the challenged conduct could not reasonably happen again — otherwise a defendant could stop, get the case dismissed, then resume the conduct later.
- Because Nike was the one claiming its covenant not to sue had ended the dispute, the Court held Nike carried the burden of proving the covenant covered everything Already could reasonably be expected to do.
- The Court read the covenant's language and found it unconditional, irrevocable, covered Already's distributors and customers, and protected not just current designs but any future shoes that were 'colorable imitations' of them — leaving the Court unable to imagine a shoe that would infringe yet fall outside the promise.
- Once Nike met that burden, the obligation shifted to Already to point to concrete plans for a shoe that would infringe the trademark yet escape the covenant's protection, since only Already had knowledge of its own future product plans.
- Already never identified any such shoe in the trial court, the appeals court, or before the Supreme Court, so the Court concluded it was absolutely clear the dispute over Already's own products could not recur.
- The Court separately rejected Already's fallback arguments — that investor hesitation, retailer pressure, or simple status as a competitor gave it a standalone right to challenge the trademark — because none of those showed the kind of concrete, non-speculative harm needed to bring a case to federal court in the first place.
Doctrinal impact
Cases affected by this decision
Reaffirms Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc. (528 U. S. 167)
The Court relied on this case's rule that a defendant claiming voluntary compliance moots a case bears a formidable burden.
Distinguishes Deakins v. Monaghan (484 U. S. 193)
The Court explained this case actually applied the voluntary cessation test rather than rejecting it, as Nike had argued.
Distinguishes Cardinal Chemical Co. v. Morton Int'l, Inc. (508 U. S. 83)
The Court said this case about deciding two independent grounds for a ruling did not apply to the jurisdictional mootness question here.
Distinguishes Altvater v. Freeman (319 U. S. 359)
The Court found this case inapplicable because there, unlike here, the parties still had an ongoing royalty dispute.