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Article III Standing vs. Covenant Not to Sue: Rather than Take Its Action to the Patent and Trademark Office, Already, LLC Petitions the Supreme Court to 'Just Do It'

Currently trademark bullying has become a serious concern for many small businesses that feel as though powerful corporations are abusing aggressive trademark enforcement and litigation techniques to crush genuine competition. No doubt these concerns merit the serious consideration of all interested parties seeking reasonable solutions to the issue. However, most commentary on the subject plays up gross generalizations of the innocent mom-and-pop shop versus the greedy corporation for emotional appeal, hampering thoughtful discussion. The facts surrounding Already, LLC v. Nike, Inc. involve potential trademark infringement and bullying. Believing Already was infringing the registered trademark it had over the Air Force 1 shoe design, Nike brought an infringement suit. In response Already brought several declaratory judgment counterclaims seeking the invalidity and cancellation of Nike’s mark. Once Nike realized the judge would not likely rule in its favor, it issued a covenant not to sue seeking to dismiss the entire action so as to avoid any risk of losing its trademark. Already, on the other hand, wanted its day in court, for it had spent serious resources preparing for litigation and had lost all its major U.S. retailers to the fear of secondary liability. The issue became whether standing existed in the wake of Nike’s covenant. The Supreme Court provided a straight forward analysis regarding the issue of mootness and the voluntary cessation doctrine and emphasized the importance of Article III standing restrictions in preserving the separation of powers. In order to appreciate the significance of the Court’s judicial restraint in deciding to dismiss Already’s counterclaims, one must understand the procedural posture of the parties. Given the right argument, Already could have won on procedure, but the arguments it made failed to respect the limitations the Constitution requires.