Nike’s No-Suit Covenant Goes to Washington

(CN) - The Supreme Court said Monday that it will decide whether a shoemaker can still fight a certain trademark after Nike dismissed its infringement claims and agreed not to sue.

Already LLC dba Yums hoped to cancel Nike's trademark with counterclaims four months after the athletic wear giant filed suit for infringement in July 2009.

Nike's complaint took issue with two examples of Yums footwear, known as Sugar and Soulja Boy, claiming that the shoes copied its 1982 design for the Air Force 1 shoe.

Consumers buy millions of Air Force 1 shoes every year in more than 1,700 color combinations.

Nike's 2008 trademark registered "the design of the stitching on the exterior of the shoe, 9 the design of the material panels that form the exterior body of the shoe, the design of the wavy 10 panel on the top of the shoe that encompasses the eyelets for the shoe laces, the design of the 11 vertical ridge pattern on the sides of the sole of the shoe, and the relative position of these 12 elements to each other."

In March 2010, Nike gave Yums a covenant not to sue, saying that Yums' actions "no longer infringe" sufficiently to warrant litigation. The document obligated Nike to refrain from prosecuting Yums over the initial claims.

A federal judge then dismissed Nike's claims with prejudice, and dismissed Yums' counterclaims without prejudice. The Manhattan court ruled that Yums' claims no longer met the standard in light of the covenant.

The 2nd Circuit affirmed in November 2011.

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