* Nike accused smaller rival Already of trademark violation
* Rival accused of copying elements of Air Force 1 sneakers
* Court: Already's claim mooted after Nike dropped own case
WASHINGTON, Jan 9 (Reuters) - Nike Inc 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 and luxury goods makers Coach Inc and LVMH Moet Hennessy Louis Vuitton SA, 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.
But Already, based in Arlington, Texas, refused to drop its own case and accused Nike of dropping the original lawsuit to deprive courts of jurisdiction.
Roberts, however, said that allowing Already's lawsuit to continue would encourage large and small companies to use litigation as a "weapon" rather than as a last resort to settle disputes, which could discourage innovation.
"Accepting Already's theory may benefit the small competitor in this case," he said. "But lowering the gates for one party lowers the gates for all. As a result, larger companies with more resources will have standing to challenge the intellectual property portfolios of their more humble rivals - not because they are threatened by any particular patent or trademark, but simply because they are competitors in the same market."
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.
Two companies with well-known trademarks, clothing maker Levi Strauss & Co and automaker Volkswagen AG, filed briefs supporting Nike.
The case is Already LLC v. Nike Inc, U.S. Supreme Court, No. 11-982.
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.