Nike sued competitor Already (dba Yums) in New York federal court for infringement of its registered trade dress in the super popular Air Force 1 footwear, an example of which is shown above. Yums filed counterclaims for declaratory relief that there was no infringement and that Nike’s Air Force 1 trade dress was invalid, seeking cancellation of the USPTO federal registration in the process. Upon conducting discovery, Nike determined that Yums’ conduct did not rise to the level of infringement and issued a fairly broad covenant not to sue — by which Nike agreed not to file any claim for trademark infringement or related claims “based on the appearance of any of [Yums'] current and/or previous footwear product designs, and any colorable imitations thereof, regardless of whether that footwear [was] produced, distributed, offered for sale, advertised, sold, or otherwise used in commerce before or after the Effective Date” of the covenant. The covenant also covered Yums’ distributors and customers.

Naturally, the court dismissed Nike’s claims and Nike subsequently sought to dismiss defendants’ counterclaims. In an aggressive move, Yums opposed, claiming it had the right to proceed with its request for cancellation of the Nike trade dress registration.

On January 9, 2013, the Supreme Court affirmed the Second Circuit’s dismissal of defendants’ counterclaim. The broad scope and breadth of the covenant not to sue removed any “case or controversy” between the parties, such that the court no longer had subject matter jurisdiction over the matter. Nevertheless, Yums could still pursue cancellation at the Trademark Trial and Appeal Board.

Practice Notes :

Setting aside the interesting procedural issues in this case, we believe Already v. Nike highlights the following practical considerations for trademarks owners and practitioners:

1. Seek trade dress registration when you can: regardless of the result in this particular case — and whether Yums successfully seeks to cancel Nike’s trade dress registration– companies sometimes overlook seeking proactive protection for their unique packaging or product design or the distinctive appearance and characteristics of their product or service offerings.

2. Refrain from pursuing a potential infringer unless you are reasonably certain your claims rely on strong, compelling senior rights and that any of your underlying registrations are not vulnerable to cancellation. Of course, it’s always possible certain facts will not be revealed until discovery is conducted, but it’s a good idea to slow down and carefully weigh all the facts available before throwing valuable corporate resources into a trademark dispute that could backfire.

3. When issuing a covenant not to sue, make it sufficiently broad in scope, as in this case. Also keep in mind Justice Kennedy’s dissent: covenants not to sue should not routinely be used in an effort to moot litigation that a trademark owner initiated.

Recently, news of California medical marijuana dispensaries selling a strain called “Linsanity” set loose Jeremy Lin’s lawyers—demand letters a flurry allegedly seeking apologies. This isn’t the first time a celebrity name has been used in connection with medical marijuana—does Tom Cruise Purple, aka Purple Cruise ring a bell?

Lin’s trademark attorney, Pamela Deese, commented to the media that, “You can’t file a trademark when there’s a clear connection to someone else’s name . . . [i]n this case, Jeremy Lin has the right to his name and related names and marks, as well as his signature, voice and likeness. That’s all part of his intellectual property.” See here

Certainly using a famous name without permission on any product, much less medical marijuana, is sure to raise some eyebrows. There are several bases on which to form a claim. To put an end to LINSANITY brand medical marijuana, Ms. Deese could assert Mr. Lin’s protected right of publicity. In California, the right of publicity protects the unknown and well-known from impermissible uses of their name or likeness. Although the claim does not have to be based on use of an actual name or picture, the alleged impermissible use must at least identify the plaintiff.
Nicknames, cars, even robot likenesses have been found to satisfy the requirements. Is Linsanity a nickname for Mr. Lin or a reference to his explosion onto the basketball scene? Does it make a difference?

Ms. Deese’s assertions also might be referring to a claim for false endorsement under the Lanham Act, which does not require a trademark as the basis of the claim. A claim under the Lanham Act may be based on the “celebrity” of the plaintiff. No one wants to insult Mr. Lin by suggesting he isn’t famous enough to raise this cause of action . . .

Ms. Deese also might be referring to garden-variety trademark infringement based on Mr. Lin’s pending application to register the mark LINSANITY for various goods including, duffel bags, cups, mugs, clothing, action figures, sporting goods, and sports drinks. Likelihood of confusion with medical marijuana? How about tarnishment of Mr. Lin’s famous mark? Things are getting personal again.

Practice Note: Cobalt has been talking about this issue for some time; in fact, we’ve dedicated two different Cobalt Academy sessions to copyright and trademark issues related to medical marijuana. March 2011 Academy.

What do we think? For starters, don’t use a famous name without permission. And don’t think that trademark protection isn’t a viable strategy in the world of medical marijuana—for instance, we’ve proposed measures such as seeking state registrations and ensuring that your brand strategy is law-abiding. In unchartered waters, treading legally is the best step toward protecting yourself and your customers’ best interest.

In a decision handed down by the Court of Justice of the European Union on July 12, 2011, eBay has been found to be potentially jointly liable for trademark infringement along with individuals selling infringing goods on the eBay auction site because it had prior knowledge of the infringement.  Paris-based cosmetics company L’Oréal brought the complaint against eBay arguing that it is liable for trademark infringement because it is involved in the pre-sale, sale and after-sale processes of selling infringing products.  The Court agreed and held that an operator of an electronic marketplace that has provided active assistance in the sale of products rather than just taking a neutral position between the buyer and seller cannot be protected by the European Union’s e-commerce law exemption which applies only to parties playing a neutral online role.

eBay purchased keywords from online advertising services, such as Google Adwords, that included registered trademarks in order to direct potential customers seeking to purchase those goods to its website.   However, the goods being sold included both legitimate goods as well as counterfeit and unpackaged goods from non-European Economic Area (EEA) countries thereby infringing upon L’Oréal’s trademarks.  eBay implemented its own precautions against infringement by incorporating a take-down notification system and operating a Verified Rights Owner Program (VERO), however L’Oréal was not a member of the VERO program and rather turned directly to eBay for assistance with handling the infringing goods.  However, unsatisfied with eBay’s response, L’Oréal pursued its action before the High Court of England and Wales which referred several questions to the European Court.

In addition to joint liability, the Court considered the extent of injunctive relief that intellectual property owners could obtain against online intermediary websites, such as eBay, whose services are used as tools to infringe upon the IP of others.  The Court found that it could impose injunctions against online marketplaces requiring them to suspend accounts of those utilizing the site to sell fraudulently-marked goods or to employ measures which would make it easier to identify infringers.  However, the injunction would not require the website to actively monitor all activity of the website or prevent the sale of all goods bearing a particular trademark.

By finding eBay liable for joint liability, the European court differs from cases upheld in the United States.

In the Tiffany (NJ) Inc. v. eBay, Inc., cases in the federal district courts in New York, the federal courts rejected Tiffany’s argument that an intermediary website may have secondary liability thrust upon it if it has “generalized” information that its website was being used to sell infringing merchandise.  The court deduced in Tiffany that even though eBay had general knowledge of infringement by various sellers, it did not require eBay to prevent the same sellers from selling goods via their eBay accounts because general knowledge of infringement is insufficient to determine that actual infringement occurred.  eBay would have been liable, based upon Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844 (1982) if it continued offering its services to sellers it knew or had reason to know were infringing on the mark’s holder’s marks.

Practical Considerations

What does this decision mean for clients who operate websites used or accessed from the European Union?

This decision suggests that, in the E.U., website owners might consider taking a more active role in addressing and preventing infringement upon learning of potential infringement from a trademark holder.  Indeed,  although an exemption from liability exists under the European E-Commerce Directive, any active role by the website owner in promoting items for sale by users may negate this exemption.

Just when he thought it was safe to go back in the water (or the boxing ring as the case may be), it appears that Mike Tyson’s legal troubles continue to fight on. The latest contender is Michael Wayne Landrum, a former boxer (turned paralegal according to his complaint) who probably wouldn’t last long in the ring with Mike Tyson but is suing the former champ for $115,000,000 for trademark infringement based on Tyson’s use of the name “Iron Mike”.

In round one of the recently filed complaint with the California Central District Court, Landrum, who is duking out his own legal representation, contends he owns trademark rights in the name “Iron Mike.” Although Landrum claims to have a federal trademark registration for the mark IRON MIKE, the court is likely to call foul as Landrum appears to have confused his California state trademark registration (which he does apparently own) with the national protection of federal registration (which he does not appear to own).

While Landrum does attach a 1996 letter from the California State Athletic Commission, which states his professional ring name was “Iron Mike Landrum,” and his California state registration (which claims a date of first use of November 1983), it remains to be seen whether such evidence will be enough to deliver TKO.

Stay tuned as the two contenders duke it out over several issues. Did Mike Tyson use the mark IRON MIKE to offer good/services or was it just a nickname bestowed upon him by his fans? Who used the mark first and in connection with what goods/services? Does Mike Tyson’s fame make confusion unlikely? Did Landrum wait to long to bring these claims? Are Landrum’s rights limited to California only?

If the author were of the betting type, the wager would certainly be placed in Tyson’s corner! Stay tuned for round two.