A compromise gone
wild
The shoe war is about to get bloody. The hunter now becomes the
hunted. Never trust your enemy. Ok, enough of the clichés. The United States
Supreme Court has created a twist in the manner how trademark infringement lawsuits
can prosper.
In the original case of Nike
v. Already (U.S. Supreme Court Order 11-982
June 25, 2012), the former filed trademark infringement claims against the
latter for the dilution of a registered trademark. Before the case went any further,
or before it actually got to a “full-blown” trial, Nike gave a “Covenant Not to Sue” and asked the District Court
(Federal Court) to dismiss the lawsuit. Nike,
in short filed an “affidavit of desistance” and proclaimed that they were
longer interested in suing Already. Nike filed a Motion to Dismiss for its
own lawsuit. Seems open and shut, right? Well, the proceedings did not end
here.
As a matter of defense, an alleged infringer through a compulsory counterclaim
may opt to attack the validity of the plaintiff’s registered trademark. This is
to bank on the idea that the trademark that is alleged to have been
infringed wasn’t valid from the beginning. Crushing the leg it was standing on,
so to speak. Already claimed (through
smart lawyering or actually using a parallel court’s jurisprudence) that a
plaintiff’s motion to dismiss its own infringement claims against an alleged trademark
infringer does not take away the power of the court to hear the defendant’s counterclaim
of (in)validity of the trademark.
Hard to swallow? Well here is the spoonful of sugar. A claim of infringement
presupposes a registered trademark. If that trademark is rendered invalid, the
claim of infringement is rendered moot. Here, Nike sort of said, “Ok, we won’t sue you anymore, water under the
bridge, eh?”. Already replied, “Well, thank you. But we still think
your trademark is wrong”.
Already wanted its
counterclaim (dressed as a defense) to prosper despite Nike’s decision to drop its lawsuit. Without going to legalese, the
United States Supreme Court agreed with Already
and Nike has gone from attacking to
defending. The tables were turned. (You thought no more clichés, right?).
This could prove to be an interesting development in the intellectual
property litigation paradigm. Could it be a slippery slope? Obviously, legal
strategies have to be more fine tuned now as any back up plans for an alleged
infringer are strengthened because of this decision. The moment of filing a
lawsuit is actually the new “point of no return” (I promise, that is the last cliché).
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The
material in this online newsletter has been drafted and edited by Atty.
Roderick Vera and is for informational purposes only. The material above does
not constitute nor become legal advice. Please consult with an attorney for
legal advice before relying on any information found on this newsletter. For
any questions, inquiries or comments, please see the contact information above.
